Securities and Exchange Board of India (SEBI) has approved several Initial Public Offerings (IPOs) as per an update on Monday. These companies, namely Capital Small Finance Bank, Jesons Industries and Uma Exports, received the market regulator’s observation letters on 7-8 February 2022.
These companies had filed their draft red herring prospectus (DRHP) with SEBI between September and November 2021. Capital Small Finance Bank is a lending institution focusing on the middle-income customer segment. Jesons Industries manufactures speciality coating emulsions, whereas Uma Exports is a B2B exporter of building materials and agricultural produce.
Now, let us take a look at these three IPOs in more detail.
Capital Small Finance Bank IPO
This small finance bank mainly focuses on customers in the middle-income segment, extending loans to small borrowers. It received the status of a scheduled commercial bank from SEBI in 2017. Today, the bank has 159 branches and 161 ATMs spread across four states – Rajasthan, Punjab, Delhi and Haryana.
Capital Small Finance Bank has the backing of institutional investors like HDFC Life, ICICI Prudential, SIDBI, OIJIF II and PI Ventures LLP. According to its financials in June 2021, the bank’s net interest income was up 20% from last year to Rs. 570.49 crores. Its net profits for the same period was at Rs. 12.18 crores up from Rs. 6.8 crores last year.
The lender plans to raise funds via an IPO with a fresh issuance of equity shares worth Rs. 450 crores. Along with this, there will be an offer for sale (OFS) where existing shareholders and promoters will offload 38.40 lakh shares. The following are the shareholders and their stakes in the upcoming IPO:
- Oman India Joint Investment Fund II – 8.37 lakh shares
- Amicus Capital Private Equity I LLP – 6.04 lakh shares
- PI Ventures LLP – 3.37 lakh shares
- Amicus Capital Partners India Fund I – 70,178 shares
- Other shareholders – 19.91 lakh shares
Capital Small Finance Bank primary objective for this IPO is to augment its tier-I capital base. It will use the proceeds from the fresh issuance to meet its future capital requirements. The book running lead managers of this IPO include Axis Capital, Edelweiss Financial Services and SBI Capital Markets.
Read more: UMA EXPORTS LIMITED TO FLOAT RS. 60 CRORE IPO
Apply for UMA exports IPO
Jesons Industries IPO
Jesons Industries is a well-known producer of SCE (speciality coating emulsions) and tape and labels with water-based PSA (pressure-sensitive adhesives) in India. The company sells its products to over 50 countries worldwide, with a strong foothold in Asia-Pacific, Middle Eastern and African markets.
This company offers a catalogue of over 170 products used in various industrial sectors like packaging, paints, chemicals for construction, leather, textile, paper and carpet manufacturing etc. Some of its leading brands include Blue Glue, Polytex, Coviguard, Bondex, Rdymix and INDTAPE.
According to its financials in March 2021, the company reported a 213.25% increase in net profits to Rs. 92.88 crores. During the same period, its revenue from operations increased 20% to Rs. 1,085.72 crores.
Jesons Industries filed its draft papers with SEBI to raise Rs. 900 crores through an IPO. This will comprise a fresh issuance of shares worth Rs. 120 crores and an OFS of 1.21 crores shares by Dhiresh Shashikant Gosalia. The company may also consider a private placement of shares worth Rs. 24 crores before the IPO.
Jesons Industries IPO will include a reservation for the employee category with 77,000 equity shares allotted. Rs. 90 crores from the fresh issuance will be used to repay the company’s borrowing and some amount for general corporate purposes.
Uma Exports IPO
Uma Exports is a Kolkata-based private company engaged in exporting building materials like granite, marble and marble chips. Since 1997, the company has diversified its business portfolio into the export of agricultural products and commodities.
The company is engaged in trading grains such as rice, wheat, corn and spices like turmeric, coriander, dry red chillies and cumin seeds. It also imports pulses like faba beans, black urad dal, lentil and tur dal to India in bulk quantities. Other products traded include sugar, tea and agricultural feed such as soya bean meal and rice bran de-oiled cake.
The company is mainly involved in trading products to Bangladesh in bulk quantities. It also imports products from Australia, Canada and Myanmar and exports to Malaysia and Sri Lanka. This B2B trading company generated Rs. 7.52 billion and net profits of Rs. 122 million in the year ended on 31 March 2021.
On 25 September 2021, the company filed preliminary papers with SEBI for Rs. 60 crores IPO. It will be a pure OFS by promoters Rakesh Khemka and Sumitra Devi Khemuka. There will be no fresh issuance of shares or pre-IPO placement for this issue.
The company plans to use Rs. 50 crores from the IPO to fund its working capital requirements. It will use the rest of the proceeds for repayment/prepayment of its borrowings and general corporate purposes. Uma Exports has appointed Corporate Capital Ventures Pvt Ltd as the only lead manager, while Mas Services Ltd is the Registrar.
SEBI has provided observation letters to these companies for the above IPOs, who filed their draft papers last year. This means these companies have the market regulator’s green light to launch their IPOs anytime this year. Interested investors may want to do a careful examination and assess their risk tolerance before investing in one of these IPOs.
Source: Business Standard
Frequently Asked Questions
- What is the promoter’s stake in Jesons Industries?
The main promoter Dhiresh Gosalia has an 86.53% stake in his company before the IPO. The rest, including Jhelum Gosalia, Ravina Shah and Madhavi Gosalia, have a 13.47% stake.
- Who are the lead managers of Jesons Industries IPO?
Axis Capital and JM Financial are appointed lead managers of the Jesons Industries IPO.
- What is Uma Export’s main business model?
Uma Export is mainly involved in trading agro commodities. It procures pulses from countries like Canada, Myanmar and Australia in a way that saves expenditure and freight costs. Then, it switches exports/imports across commodities in response to price/demand.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.