Upcoming IPOs 2023: With many back-to-back mainboard IPOs open for subscriptions and other listings witnessed by investors this week, Diwali week is off to a terrific start. Post-Diwali, the IPO mania is expected to continue, with around seven IPOs anticipated before the end of the year.
The IPOs to hit the primary market after Diwali are Tata Technologies, Gandhar Indian Oil Refining Limited, Fedbank Financial Services Limited, Indian Renewable Energy Development Agency Limited (IREDA IPO), Flare Writing Industries Limited, and Allied Blenders & Distillers. Co., Ltd., and Mukka Proteins Ltd.
According to Kris Arun Kejriwal, founder of Kejriwal Research and Investment Services, an advisory firm, the Diwali season has started with a bang, and the season after that has seen IPOs in the last three days, and it seems that right after Diwali we will see IPOs. Back to square one, starting with the number of issues tapping the market.
Tata Technologies' largest and most significant IPO is set to go live soon; It is from the defense sector. Other companies in the banking sector include Fedfina, a non-banking financial institution (NBFC) that specializes in financing gold loans and houses. Other companies include Gandhar Oil Refinery India, which operates in the chemical industry, Flair, which specializes in writing instruments and consumerware from the plastics segments.
Next, there is a possibility for Allied Blenders & Distillers (ABD), an alcoholic beverage company that manufactures and markets its own alcoholic beverages, to come up with its IPO. A few other smaller IPOs for Rs 200-250 crore are also possible to hit the primary market; Mocha Proteins is one of them. Indian Renewable Energy Development Agency (IREDA), a government-affiliated organization, is responsible for financing renewable energy sources such as solar, wind, hydro, and so on. It finances both renewable energy and other sources of power and is in the league of the PFC and REC. It supports the entire value chain in the power industry.
“Post Diwali, the IPO frenzy is expected to continue with 5 new issues including the much-awaited IPO of Tata Technologies. While 9.57 million shares (USD 350-375 mn) of Tata IPO Technologies IPO is a 100% offer, while Rs 175-200 crore, Mukka Proteins issue is 100 fresh equity issue. Other issues are FedBank Financial Services Rs 1,100 crore, Allied Blenders & Distillers (Rs 2,000 crore, Flair Writing Industries Ltd Rs. 745 crore, and Gandhar Refining Rs. 500 crore. In my opinion, all the offerings have good business prospects. However, the price of the IPO will be the key determinant of the subscription decision," said Vinit Bolinjkar, Head of Research, at Ventura Securities Ltd.
As these IPOs approach, let's look into what to expect in terms of issue size, industry, business, peers, etc.
Gandhar Oil Refining India Limited IPO
Gandhar Oil Refinery India's IPO opens for subscription on Tuesday, November 21, and closes on Thursday, November 23. The allocation to anchor investors for the Gandhar Oil Refinery IPO is scheduled to take place on Monday, November 20, according to reports. Gandhar Oil Refinery IPO price band is awaited.
The IPO of Gandhar Oil Refinery India Ltd comprises a fresh issue of shares worth Rs 357 crore and an offer for sale (OFS) of up to 12,036,380 shares of face value of Rs 2 each by the promoter and others.
According to the draft Red Herring Prospectus (DRHP), promoter Ramesh Babulal Parekh, Kailash Parekh and Gulab Parekh would each sell 2,250,000 equity shares.
The Company will use the net proceeds of the New Issue to finance the following: investing in Texol through a loan to finance the repayment or prepayment of the loan facility obtained by Texol from Bank of Baroda; Capital expenditures through the purchase of equipment and civil work necessary for the expansion of the automotive oil capacity at our Silvassa plant; Expanding petroleum jelly capacity and accompanying cosmetic product division at our Taloja Plant; expanding white oil capacity by installing blending tanks at the Taloja plant; Financing our company's working capital requirements; and general corporate purposes.
The registrar for Gandhar Oil Refinery India's IPO is Link Intime India Private Ltd, while the book-running lead managers are Edelweiss Financial Services Ltd and ICICI Securities Limited.
The company's listed industry peers are Savita Oil Technologies Ltd (with a P/E ratio of 8.25), Apar Industries Ltd (with a P/E ratio of 25.71), Panama Petrochem Ltd (with a P/E ratio of 9.49), Galaxy Surfactants Ltd (with a P/E ratio of 35.37), Privi Specialty Chemicals Ltd (with a P/E ratio of 47.21), Rossari Biotech Ltd (with a P/E ratio of 42.00) and Fairchem Organics Ltd (with P/E ratio).
According to DRHP, the company is a leading white oil manufacturer in terms of revenue with a growing focus on downstream consumer and healthcare industries (Source: CRISIL Report).
Gandhar filed a draft prospectus in December last year. Gandhar Oil Refinery (India) received approval from market regulator, Securities and Exchange Board of India (SEBI), for its proposed initial public offering (IPO) in June.
Fedbank Financial Services Ltd IPO
The Fedbank Financial Services Ltd IPO opens for subscription on Wednesday, November 22, and closes on Friday, November 24. The allocation to anchor investors for Fedbank IPO is scheduled to take place on Tuesday, November 21, according to reports. Fedbank Financial IPO price band is awaited.
Federal Bank arm Fedfina IPO, comprises of a fresh issue of equity shares amounting to Rs 750 crore and an offer for sale (OFS) of up to 70,323,408 equity shares by the promoters selling shareholders, and promoter group make up the offer, which has a face value of INR 10 per share.
Federal Bank, the promoter shareholder, may sell up to 16,497,973 shares, and True North Fund VI LLP, the other shareholder, may sell up to 53,825,435 shares of the offer for sale up to 70,323,408 equity shares.
Fedfina, the Federal Bank arm, is one of the five NBFCs in India that have been supported by private banks.
ICICI Securities Ltd, BNP Paribas, Equirus Capital Private Ltd, and JM Financial Ltd are the Book Running Lead Managers (BRLM) to the issue and Link Intime India Private Ltd is the registrar to the offer.
FedFina's DRHP arm filed for an initial public offering last year. However, the company pulled out of it as it found the market conditions unfavorable. The company is now reconsidering its capital raising options after the expiry of the regulatory approval it obtained earlier and submitted documents to SEBI in July.
The company's industry peers are Aptus Value Housing (P/E 27.04), IIFL Finance (P/E 14.52), Five Star Business Finance (P/E 31.73), Manappuram Finance Limited (P/E 31.73), /EB 7.28 ) and Muthoot Finance Company Limited (with a P/E of 14.29).
Tata Technologies IPO
One of the most anticipated IPOs on the Street, Tata Technologies, a subsidiary of Tata Motors, filed a SEBI addendum to the DRHP in October. Tata Technologies will offer 9.57 lakh crore equity shares in its planned initial public offering (IPO) at a face value of Rs 2 per share, according to the addendum filed with SEBI.
Tata Motors will sell up to 8.11 crore shares through an offer for sale as part of the Tata Tech IPO, Alpha TC will sell up to 9.71 crore shares, and Tata Capital Growth Fund I will offer up to 48.58 lakh shares.
Financial firms like JM Financials, Citi, and BoFA Securities have been chosen by the company to assist with the IPO process.
The company's industry peers are KPIT Technologies Ltd (with a P/E of 83.10), L&T Technology Services Ltd (with a P/E of 40.92) and L&T Technology Services Ltd (with a P/E of 70.67).
Indian Renewable Energy Development Agency Limited IPO (IREDA IPO)
The IPO of the Indian Renewable Energy Development Agency is the first by a public sector enterprise after Life Insurance Corp.’s issue in May 2022.
The IPO will involve a fresh issue of up to 403.16 million shares and an offer for sale (OFS) of up to 268.78 million equity shares by the President of India, acting through the Ministry of New and Renewable Energy. The offer includes reservations for subscriptions by employees.
According to the draft red prospectus (DRHP), the proceeds from the new issue will be used for augmenting its capital base to meet its future capital requirements and onward lending.
The company has appointed IDBI Capital Markets & Securities Ltd, BOB Capital Markets Ltd, and SBI Capital Markets Ltd as managers of the issue.
The company's listed industry peers are REC Ltd (with a P/E of 5.81) and Power Finance Corporation (with a P/E of 4.52).
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