Five IPOs to hit the market in the first half of November; seek to raise more than Rs 27,000 crore
After a month of gap, the primary market is heading for a busy period, with five companies, including Paytm parent company One97 Communications and policybazaar parent PB Fintech, lining up their IPOs in the first half. November to collectively raise over 27,000 crore rupees.
The other three companies whose first share sales are expected to open are Sapphire Foods India, which operates KFC and Pizza Hut outlets, decorative aesthetic supplier SJS Enterprises and microcrystalline cellulose maker Sigachi Industries.
The IPOs of FSN E-Commerce Ventures Ltd, which operates the online marketplace for Nykaa beauty and wellness products, and Fino Payments Bank are currently open for public subscription.
The initial three-day sales of Nykaa and Fino Payments Bank shares will end on November 1 and 2, respectively. Nykaa is looking to raise Rs 5,352 crore through its IPO, while financial technology firm Fino Payments Bank is looking to mobile Rs 1,200 crore through the initial stock sale.
Together, these seven companies will raise nearly 33,500 crore rupees from the initial sales of shares. Of these, a large part will be harvested by technology-based companies. Previously, Aditya Birla Sun Life AMC launched its Rs 2,778 crore on the initial stock sale on September 29.
âBull markets are the best times when any business that goes public seems to get better bonuses and reviews on the business,â Prateek Singh, Founder and CEO of LearnApp.com.
âTech companies in particular get a better premium because of their ability to scale exponentially, which is why we are seeing a lot of tech startups raising funds by going for an IPO this time around,â he said. declared.
He further said that the trend of tech companies going public will continue for the immediate future until the market calms down and goes down. So if the markets go down in the future, IPOs will go down as well. So far in 2021, up to 41 companies have launched their IPOs to raise Rs 66,915 crore and Devina Mehra of First Global said the year is expected to end with a primary market fundraiser of Rs 1 lakh crore.
Apart from that, PowerGrid InvIT, the Infrastructure Investment Trust (InvIT) sponsored by the Power Grid Corporation of India, recovered Rs 7,735 crore from its IPO and Brookfield India Real Estate Trust raised 3 800 crore rupees through its initial sale of shares. Fundraising so far this year is well above the Rs 26,611 crore raised by 15 companies when selling initial shares throughout 2020.
Such impressive fundraising through IPOs was last seen in 2017, when companies raised Rs 67,147 crore through 36 sales of initial shares. Mehra, founder of portfolio manager First Global and Smallcase, said: âWhenever a fundraiser is available, everyone goes for it until it’s at the frenzy stage. We’ve seen this happen a few times in the past in the IPO market as well – it happens every few years. IPOs will continue until the market remains favorable. She also advised investors to remain cautious.
âJust because an IPO is in high demand or is very heavily oversubscribed doesn’t mean it will do well in the years to come. Lots of mainstream tech IPOs around the world like Uber, Lyft, etc. have not performed well in the aftermarket, âshe added. Dgital One97 Communications, which operates under the Paytm brand, is expected to release its Rs 18,300 crore IPO on November 8.
The IPO includes a new issue of shares valued at Rs 8,300 crore and Rs 10,000 crore from the Offer for Sale (OFS) by existing shareholders.
The company has set a price range of Rs 2,080-2,150 each, implying that the company’s valuation is Rs 1.44 lakh crore-Rs 1.48 lakh crore.
âThe biggest merit of Paytm’s IPO would be that they have so much more diverse regulatory access under one roof. This focus on diversification means that none of their particular business books have depth unlike other major players who focus more on specialization, âsaid Nikhil Kamath, co-founder of True Beacon and Zerodha.
The Rs 5,710 crore IPO of PB Fintech, which operates the online insurance platform Policybazaar and the Paisabazaar credit comparison portal, includes a new issue of Rs 3,750 crore of shares and an offering sales of around Rs 1,960 crore by existing shareholders. The issue, with a price range of Rs 940 to Rs 980 per share, will be open for public subscription from November 1 to 3.
The initial sale of Sapphire Foods India shares will open for public subscription on November 9 and close on November 11. The IPO will be entirely an offer to sell 1,75 69,941 shares by the promoters and existing shareholders.
According to market sources, the IPO is expected to bring in Rs 1,500-2,000 crore. The Rs 800 crore IPO of SJS Enterprises is entirely an offer to sell shares worth Rs 710 crore by Evergraph Holdings Pte Ltd and shares up to Rs 90 crore by KA Joseph.
The issue, with a price range of Rs 531-542 per share, will open on November 1 and end on November 3. Sigachi Industries will issue 76.95 lakh shares via IPO and expects to absorb Rs 125.43 crore in the high end. from the price range of Rs 161-163 per share. Looking ahead, Mehra said that new economy companies like e-commerce, fintech, and tech startups are the ones leading the next round of capital entering the economy and we are witnessing the start of this boom with aligned IPOs.