After a month long gap,
the primary market is heading for a busy time, with five firms including Paytm
parent One97 Communications and policybazaar parent PB Fintech have lined up
their IPOs in the first half of November to raise over Rs 27,000 crore collectively.
The other three firms whose
initial share-sales are set to open are Sapphire Foods India, which operates
KFC and Pizza Hut outlets, decorative aesthetics supplier SJS Enterprises and
microcrystalline cellulose manufacturer Sigachi Industries.
The IPOs of FSN
E-Commerce Ventures Ltd, which runs online marketplace for beauty and wellness
products Nykaa, and Fino Payments Bank are currently open for public
subscription.
The three-day initial
share-sales of Nykaa and Fino Payments Bank will conclude on November 1 and
November 2, respectively.
Nykaa is looking to raise
Rs 5,352 crore through its IPO, while fintech firmFino Payments Bank is seeking
to mobile Rs 1,200 crore through the initial share-sale.
Together, these seven
companies will raise nearly Rs 33,500 crore through initial share-sales.
Of these, a major chunk
will be garnered by technology based companies.
Prior to these, Aditya
Birla Sun Life AMC had floated its Rs 2,778-crore in initial share-sale on
September 29.
"Bull markets are the
best times when any company going public seems to get better premiums and
valuations on the business," Prateek Singh, founder and CEO, LearnApp.com.
"Tech companies in
particular get a better premium because of their ability to scale
exponentially, which is why we are seeing many tech startups raise cash by
going for an IPO this time," he said.
He, further, said that the
trend of technology based companies going public to continue in the immediate
future until the market calms down and moves downward.
So if the markets fall in
the future, the IPOs will also reduce.
So far in 2021, as many as
41 companies have floated their IPOs to raise Rs 66,915 crore and Devina Mehra
of First Global said the year should be closing with Rs 1 lakh crore primary
market fundraise.
Apart from these, PowerGrid
InvIT, the infrastructure investment trust (InvIT) sponsored by the Power Grid
Corporation of India mopped up Rs 7,735 crore through its IPO and Brookfield
India Real Estate Trust raised Rs 3,800 crore via its initial share-sale.
The fund raising so far in
this year is way higher than Rs 26,611 crore collected by 15 companies through
initial share-sales in the entire 2020.
Such impressive fund
raising through IPOs was last seen in 2017 when firms mobilised Rs 67,147 crore
through 36 initial share-sales.
Mehra, founder of First
Global and Smallcase portfolio manager, said, "Anytime any route for
raising funds is available, everyone jumps in till it is at the stage of a
frenzy.
"We have seen that
happen several times in the past in the IPO market as well - happens every few
years.
"The IPOs will keep
coming till the market remains favourable."
She also advised investors
to remain cautious.
"Just because an IPO
is a very fancied one or is very heavily oversubscribed doesn't mean that it
will do well in the coming years.
"Many fancied consumer
tech IPOs globally like Uber, Lyft etc have not done well in the
aftermarket," she added.
Dgital firm One97
Communications, which operates under Paytm brand name, is set to come out with
it Rs 18,300-crore IPO on November 8.
The IPO comprises fresh
issuance of equity shares worth Rs 8,300 crore and Rs 10,000 crore from offer
for sale (OFS) by existing shareholders.
The company has fixed a
price band of Rs 2,080-2,150 apiece, which implies that the firm's valuation
stands at Rs 1.44 lakh crore-Rs 1.48 lakh crore.
"The biggest merit for
Paytm's IPO would be that they have so much more diversified regulatory access
under one roof.
"This focus on
diversification means that none of their particular business books has depth
unlike other major players who focus more on specialising," Nikhil Kamath,
Co-founder, True Beacon and Zerodha, said.
The Rs 5,710-crore IPO of
PB Fintech, which operates online insurance platform Policybazaar and credit
comparison portal Paisabazaar, comprises a fresh issue of Rs 3,750 crore worth
of equity shares and an offer for sale of about Rs 1,960 crore by existing
shareholders.
The issue, with a price
band of Rs 940-980 a share, will open for public subscription during November
1-3.
The initial share-sale of
Sapphire Foods India will open for public subscription on November 9 and
conclude on November 11.
The IPO will be entirely an
offer of sale of 1,75,69,941 equity shares by promoters and existing
shareholders.
According to market
sources, the IPO is expected to fetch Rs 1,500-2,000 crore.
SJS Enterprises' Rs
800-crore IPO is entirely an offer for sale of shares worth Rs 710 crore by
Evergraph Holdings Pte Ltd and shares to the tune of Rs 90 crore by KA Joseph.
The issue, with a price
band of Rs 531-542 a share, will open on November 1 and conclude on November 3.
Sigachi Industries will
issue 76.95 lakh equity shares through IPO and is planning to mop up Rs 125.43
crore at the upper-end of price band of Rs 161-163 per share.
Going ahead, Mehra said
that the new economy companies like e-commerce, fintech, and technology
startups are the ones that will lead the next round of capital coming into the
economy and we are seeing the start of that boom with the IPOs lined up.