After a short break, India’s primary market is ready for action with at least 4 big public issues: As many as 4 firms have planned up initial public offerings(IPOs) in the coming week, looking to raise a total of over ₹9,132 crores from share sales. These companies are Sona Comstar, Shyam Metalics, which will be open for public subscriptions on Monday, and Dodla Dairy and Krishna Institute of Medical Science(KIMS) Hospitals will be open on Wednesday.
It’s a bonus offer for investors as 4 mainboard companies are going to hit the street with IPOs, cumulatively raising more than ₹9000 crores.
After a busy start in the 1st Quarter of the year 2021, which saw 16 IPOs raise ₹14,944 crores, the primary market went quiet. The last IPOs were that of Macrotech Developers of ₹2500 crore which opened during April 7-9 before the 2nd Covid-19 surge.
The cooling off of the primary market was the result of strict new guidelines for merchant bankers and other intermediaries introduced by SEBI. But the activity was expected to pick up the pace again from the second half of June.
The market is at an all-time high, and it’s a perfect time to cash in on this market euphoria.
Sona BLW and Shyam Metalics will open for subscriptions on 14th June & closes on 16th June. Sona BLW has fixed a price band of ₹285-292, & Shyam Metalics has fixed a price band of ₹303-306 a share. Sona BLW aims to raise nearby ₹5550 crore, made up of a fresh issue of ₹300 crore and an offer for sale of ₹5250 crore by Singapore VII Topco III Pte Ltd, an affiliate of Blackstone. Shyam Metalics seeks to raise ₹909 crore, which comprises ₹657 crore for the fresh issue and an offer for sales of ₹252 crore. Both KIMS & Dodla Dairy will open for subscription on 16th June and closed on 18th June.
KIMS has a fixed price band of ₹815-825 as share & Dodla Dairy ₹421-428 per share for its IPOs, expected to fetch ₹2,143 crore & ₹530 crore respectively.
Investors’ appetite for ongoing IPOs is likely to be higher because of the prospect business model of most companies. Moreover, as most IPOs have been reasonably valued, factoring in high growth prospects, meaningful listing gains look to be limited. Investors should participate in IPOs considering long-term perspectives.
The equity markets are elated with liquidity & retail participation is at an all-time high. It is a better time frame for small and mid-cap Co.s to raise public money. So, it is quite natural for Co.s to tap the IPO market.
The lots of many IPOs in a single week is the result of a long channel of shares-sales with almost 40 companies filing their draft Red Herring Prospectus with SEBI since the start of the year. Many of these issues have received the SEBIs go-ahead and will be looking at the right moment to launch their IPOs. Moreover, around 20 Co.s are awaiting Sebi’s approval to launch the initial share-sale, data with SEBI showed.