Four IPOs to hit markets next week; companies eye Rs. 9,123 crore

The initial public offering (IPO) market is expected to recover due to the launch of initial share-sales by four firms scheduled next week that is expected to raise Rs. 9,123 crore (US$ 1.25 billion) collectively.

In April 7-9, Macrotech Developers (erstwhile Lodha Developers) was the last IPO that opened the market.

As per the information with exchanges, Sona BLW Precision Forgings (Sona Comstar), Shyam Metalics and Energy Ltd. plan to launch their IPOs on Monday, while Dodla Dairy and Krishna Institute of Medical Sciences plan to open for public subscription on Wednesday.

Mr. Yash Gupta, Equity Research Associate at Angel Broking, said, “Clean Science & Technology with IPO size of Rs. 1,500 crore (US$ 204.71 million) is expected to hit the primary markets in the first week of July 2021, while India Pesticides is expected to hit with its public issue this month or July.”

Mr. Naveen Kulkarni, Chief Investment Officer, Axis Securities, said. “The equity markets are glowed with liquidity and retail participation is at an all-time high. It is challenging to envisage a better time frame for small and mid-cap businesses to raise public money. So, it is quite normal for firms to tap the IPO market.”

The firms are raising funds to fund capital expenditure necessity and for general corporate targets.

Sona Comstar, an auto component maker’s Rs. 5,550 crore (US$ 757.44 million) IPO includes fresh issue of shares amounting to Rs. 300 crore (US$ 40.94 million) and an offer-for-sale (OFS) aggregating up to Rs. 5,250 crore (US$ 716.49 million) by trading shareholder Singapore VII Topco III Pte Ltd.

The IPO of Rs. 909 crore (US$ 124.06 million) of Energy Ltd. and Shyam Metalics, includes fresh issuance of equity shares worth up to Rs. 657 crore (US$ 89.66 million) and an OFS to the tune of Rs. 252 crore (US$ 34.39 million) by existing shareholders.

Krishna Institute of Medical Sciences’ IPO includes fresh issue of shares aggregating up to Rs. 200 crore (US$ 27.29 million) and an OFS of up to 2,35,60,538 equity shares from promoters and existing shareholders.

Those offering shares in the OFS include General Atlantic Singapore KH Pte Ltd., Bollineni Ramanaiah Memorial Hospitals, Dr. Bhaskara Rao Bollineni and Rajyasri Bollineni.

The IPO of Dodla Dairy consist of fresh issuance of shares worth up to Rs. 50 crore (US$ 6.82 million) besides an OFS of up to 1,09,85,444 equity shares by Dodla Sunil Reddy, Dodla Deepa Reddy TPG Dodla Dairy Holdings Pte Ltd. and Dodla Family Trust.

According to Angel Broking’s Gupta, it would be a potential opportunity for the retail investors to bring in cash due to listing profits in a very small period.

So far in 2021, 17 companies have come out with IPOs to raise Rs. 17,503 crore (US$ 2.39 billion).

Apart from this, businesses including Glenmark Life Sciences, Utkarsh Small Finance Bank, Rolex Rings and Seven Islands Shipping have received SEBI’s go-ahead to float the IPO.

Furthermore, as per the SEBI data, around 26 corporations are awaiting SEBI’s approval to introduce the initial share-sale.

Mr. Sandeep Bhardwaj, CEO, Retail at IIFL Securities said, “The FY21 strong story of IPO would continue in FY22 too. There is ample liquidity in the system and strong investor appetite for primary issues. Also, the pandemic has changed businesses across industries and several rising sectors are expected to consider tapping the markets.”

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.