Mumbai: After a brief hiatus, India’s primary market is ready for action: Up to four companies have lined up initial public offerings over the coming week, seeking to raise a total of ₹9,132 crore in share sales.
These companies are steel producer Shyam Metalics and Energy Ltd, auto parts maker backed by Blackstone Sona BLW Precision Forgings, hospital chain backed by General Atlantic Krishna Institute of Medical Science (KIMS) and Dodla Dairy backed by TPG Capital.
After a busy start to the first quarter of the calendar year, which saw 16 IPOs increase ₹14,994 crore, the primary market has calmed down. There has been only one IPO since March 31, the ₹Sale of 2,500 crore of shares of real estate firm Macrotech Developers Ltd, formerly known as Lodha Developers, according to data from leading market tracker Prime Database.
The cooling of the primary market was the result of strict new guidelines for investment bankers and other intermediaries introduced by the Securities and Exchange Board of India (Sebi). But the regulator having delayed the implementation of some of these provisions in a circular of June 2, activity should resume its pace from the second half of June.
“The markets are at an all time high and now is the perfect time to take advantage of the market euphoria. The rush of many companies to be listed is justified, ”said Aditya Kondawar, COO of JST Investment.
Sona BLW Precision Forgings and Shyam Metalics and Energy will open for subscription on June 14 and close on June 16. Sona BLW has set a price range of ₹285-292, and Shyam Metalics set their price range at ₹303-306 per share.
Sona BLW Precision aims to lift nearly ₹5,550 crore, consisting of a new issue of ₹300 crore and a sale offer of ₹5,250 crore by Singapore VII Topco III Pte Ltd, a subsidiary of Blackstone. Shyam Metalics is trying to stand up ₹909 crore, which includes a new issue of ₹657 crore and a sale offer of ₹252 crores.
KIMS and Dodla Dairy will open for subscription on June 16 and close on June 18. KIMS has set a price range of ₹815-825 a share and Dodla Dairy ₹421-428 per share, aimed at increasing ₹2,143 crores and ₹530 crores, respectively.
“Investor appetite for upcoming IPOs is likely to be high given the strong business model of most companies. Also, given the surge in NFOs (new fund offerings) launched in recent months by domestic mutual funds, they would be looking to deploy money for upcoming IPOs, which also offer good prospects for trading. long-term growth. However, since most IPOs have been reasonably priced, given the high growth prospects, significant listing gains appear to be limited. Investors should participate in these IPOs with a long-term perspective, ”said Binod Modi, head of strategy at Reliance Securities.
The consolidation of many IPOs into a single week is the result of a long pipeline of share sales with nearly 40 companies filing their draft red herring prospectuses with Sebi since the start of the year. Many of these issuers have been given the green light from Sebi and will be looking for the right time to launch their IPOs.
While the recent drought in launches may spark some excitement among investors after several IPOs over the past 2-3 quarters have generated solid listing gains, analysts said investors should be careful when they are trading. choose which IPOs they want to support.
“We believe most high net worth investor funds need to be routed to the IPOs of Shyam Metalics and Dodla Dairy, while the other two IPOs could see a mixed response. Principal investors in all four IPOs can play a key role in determining final demand in IPOs, ”said RK Gupta, advisor at IPO Mantra, a primary market consultancy.
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