The IPO lane is getting crowded as five companies, including India Shelter Finance and DOMS Industries, have lined up public offers this week on favourable market conditions. The other three companies whose maiden public issues are slated to open are Inox Group entity Inox India, Jaipur-based retail jewellery company Motisons Jewellers and Mumbai-based Suraj Estate Developers, according to their Red Herring Prospectus (RHPs).
Together, these companies are estimated to raise at least Rs 4,200 crore.
This comes on the back of 10 companies successfully concluding their maiden public issues last month. The list included the IPO (Initial Public Offerings) of Tata Technologies, which was the first company from the Tata Group to float an initial share sale in nearly two decades. Tata Consultancy Services was the last IPO from the group in 2004.
Overall, the Indian IPO market witnessed more than 44 issues that collected around Rs 35,000 crore in the current fiscal FY24 (till November).
V Prashant Rao, Director & Head-ECM of Investment Banking at Anand Rathi Advisors, attributed several factors to the hectic IPO activity in the last few weeks, including strong post-listing returns for recent public issues and robust macros.
Additionally, the recent victory of the BJP in state elections has influenced market sentiments. Investors often react to perceived stability, which contributes to market rallies.
“There have been several draft papers filings which indicate companies are gearing up to launch their IPOs in the coming quarters. Many of them, including the ones that have received Sebi clearance, are planning to launch before the general elections and hence you are seeing a flurry of IPOs getting launched,” he said last month.
Of the five initial share sale offers scheduled for the week, the IPOs of affordable housing finance company India Shelter Finance and pencil maker DOMS Industries will be open for subscription during December 13–15.
Both companies are looking to raise Rs 1,200 crore each. The public issue of Inox India will start on December 14 and conclude on December 18. Further, the issues of Motisons Jewellers and Suraj Estate Developers will open for public subscription on December 18 and conclude on December 20.
These companies are raising fresh capital to fund their business expansion, meet working capital requirements, and make loan repayments.
India Shelter Finance’s IPO comprises a fresh issue of equity shares worth Rs 800 crore and an Offer For Sale (OFS) of Rs 400 crore by investor shareholders.
The company has fixed a price band of Rs 469–493 per share for the issue. Proceeds from the fresh issue will be used to meet future capital requirements for onward lending and for general corporate purposes.
DOMS Industries’ IPO is a combination of a fresh issue of 0.44 crore shares, aggregating to Rs 350 crore, and an OFS of 1.08 crore shares, worth up to Rs 850 crore.
The company’s IPO price band is set at Rs 750 to Rs 790 per share.
The Rs 1,459 crore-IPO of Inox CVA is entirely an offer for sale of 2.21 crore shares. It has set the price band at Rs 627 to Rs 660 per share.
Suraj Estate Developers would raise Rs 400 crore entirely through a fresh issue of equity shares.
GMP Today
According to market observers, the grey market premium or GMP of Inox India IPO is at 36.36 per cent. DOMS IPO’s GMP suggests a whopping 56.2 per cent listing gains, and India Shelter Finance’s grey market premium stood 35.5 per cent higher than its IPO prices.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price. It also indicates how much gains investors are going to make on the listing day. The GMP is based on market sentiments and keeps changing.
(With PTI Inputs)
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