A Brief Overview
After a sluggish two months, following the last initial public offering (or IPO) listing made by Macrotech Developers between April 7 and 9, IPO listings are once again set to hit the market this week. Presently four companies seek to offer their shares and seek to collectively raise INR 91,23 Crores.
Shyam Metalics and Energy Limited saw its IPO reach the public this Monday.
Sona BLW Precision Forgings (also known as Sona Comstar) was also made available to the public on Monday.
Krishna Institute of Medical Sciences and Dodla Dairy are set to do the same tomorrow, Wednesday, based on information provided by exchanges.
Why Are IPOs Flooding the Market?
Initial public offerings are back in the market owed in part to the liquidity presently gushing through equity markets which have been interspersed with retail participation which is enthusiastic. This means that it’s a good time for small and mid-sized enterprises (SMEs) to generate money via the public. Their desire to tap into IPO listings therefore should not be surprising at the moment.
With the aid of funds generated via an IPO, companies can better tackle their existing debt and make arrangements for their capital expenditure requirements. Moreover, general corporate expenses will be able to be funded better as a result of the returns brought in via a public offering.
Examining this Week’s Four IPO Listings
Sona Comstar – They serve as the country’s leading auto component manufacturer. Their IPO amounts to INR 5,550 Crores with INR 300 Crores set aside in the form of shares that are fresh issues. The remaining INR 5,250 Crores will serve as an offer-for-sale. This sale will be done by Singapore VII Topco III who currently serves as a shareholder and is an affiliate of the Blackstone Group Inc. The price band of their shares ranges between INR 285 to INR 291 for a single share and is on offer until tomorrow, June 16. It was first made available on Monday, June 14.
Shyam Metalics and Energy Limited – Recognized as one of India’s primary integrated metals producing companies, Shyam Metalic’s has issued fresh equity shares amounting to INR 657 Crores in addition to an offer-to-sell valued at INR 252 Crores brought forth by their existing shareholders. Their IPO in its entirety amounts to INR 909 Crore. Each share has a price band amounting to INR 303 to INR 306 which is available to the public for purchase until tomorrow, June 16. It was first made available on Monday, June 14.
Krishna Institute of Medical Sciences – Their IPO is made up of fresh issuance of shares amounting to INR 200 Crores in their entirety in addition to an offer-for-sale amounting to INR 2.35 Crores in equity shares to be brought forth by promoters and existing shareholders. These shareholders include Bollineni Ramanaiah Memorial Hospitals, Dr. Bhaskara Rao Bollineni, General Atlantic Singapore KH Pte Limited, and Rajyasri Bollineni. Owing to the fact this IPO falls within a price frame, its IPO is anticipated to generate INR 2,144 Crores.
Dodla Dairy – Their IPO is made up of a fresh issue of shares amounting to INR 50 Crores in their entirety in addition to an offer-for-sale amounting to up to INR 1.09 Crores. This offer-for-sale would be brought forth by Dodla Deepa Reddy, Dodla Family Trust, Dodla Sunil Reddy, and TPG Dodla Dairy Holdings Pte Limited. Dodla Dairy is recognized as one of the most prominent dairy companies in southern India and will offer a fixed price for each of its shares ranging between INR 421 and INR 428 a share. The public has the opportunity to avail of the same between Wednesday, June 16, and Friday, June 17 this week. This IPO is anticipated to fetch INR 520 Crores.
Other Pertinent Information
Each of these companies will have their shares made available on and listed under the Bombay Stock Exchange and the National Stock Exchange. Retail investors have the opportunity to take advantage of such stocks on offer and score profits via the same.
2021 has thus far witnessed 17 companies offer IPOs aimed at raising INR 17,503 Crores in their entirety. The Securities and Exchange Board of India (or SEBI) has thus far granted approval to Glenmark Pharmaceuticals, Life Sciences, Seven Islands Shipping, and Rolex Rings to issue IPOs. Moreover, 26 companies await confirmation for the same via the SEBI
Many companies are increasingly looking towards offering initial public offerings owing to the increased liquidity in the system and the increased interest showcased by investors.