This week, five companies, namely India Shelter Finance and DOMS Industries, are set to launch their initial public offerings (IPOs) due to favourable market conditions. As a result, the IPO lane is becoming increasingly crowded.
According to their Red Herring Prospectus (RHPs), Inox India, Motisons Jewellers, and Suraj Estate Developers are among the other three companies scheduled to launch their initial public offerings.
Last month, 10 companies successfully concluded their inaugural public offerings, contributing to an estimated total of at least Rs 4,200 crore raised by these companies collectively. Tata Technologies, a member of the Tata Group, made history by becoming the first company in almost twenty years to launch an IPO (Initial Public Offering). The comprehensive list featured this significant milestone in the form of Tata Technologies' initial share sale.
In 2004, Tata Consultancy Services marked the final IPO from the group. Throughout the current fiscal year FY24 (until November), the Indian IPO market experienced over 44 offerings, accumulating approximately Rs 35,000 crore.
Prashant Rao, the Director & Head-ECM of Investment Banking at Anand Rathi Advisors, has attributed the recent surge in IPO activity to various factors. These include the impressive post-listing returns of recent public issues and the overall strength of the macroeconomic environment.
Furthermore, the market rallies have been impacted by the recent triumph of the BJP in state elections. The perception of stability often triggers reactions from investors, leading to changes in market sentiments.
"There have been several draft papers filings which indicate companies are gearing up to launch their IPOs in the coming quarters. Many of them, including the ones that have received Sebi clearance, are planning to launch before the general elections and hence you are seeing a flurry of IPOs getting launched," he said last month, as quoted in Business standard.
During the week, there are five initial share sale offers planned. The IPOs of India Shelter Finance, an affordable housing finance company, and DOMS Industries, a pencil maker, will be available for subscription from December 13 to 15. Both companies aim to raise Rs 1,200 crore each. Additionally, the public issue of Inox India will commence on December 14 and end on December 18.
Additionally, the public subscription for Motisons Jewellers and Suraj Estate Developers will commence on December 18 and conclude on December 20. These companies aim to secure new capital to support their business expansion, fulfil working capital needs, and repay outstanding loans.
India Shelter Finance is planning to raise funds through its Initial Public Offering (IPO). The IPO will consist of a fresh issue of equity shares valued at Rs 800 crore and an Offer For Sale (OFS) of Rs 400 crore by existing investor shareholders. The company has set a price band of Rs 469493 per share for the IPO. The funds raised from the fresh issue will be utilized to meet future capital needs for lending purposes and general corporate requirements.
The initial public offering (IPO) of DOMS Industries comprises a new issuance of 0.44 crore shares, totalling Rs 350 crore, along with an offer for sale (OFS) of 1.08 crore shares, valued at up to Rs 850 crore. The price range for the company's IPO is established at Rs 750 to Rs 790 per share.
Suraj Estate Developers plans to raise a total of Rs 400 crore by issuing new equity shares. This approach differs from the Rs 1,459 crore initial public offering (IPO) of Inox CVA, which solely consists of selling 2.21 crore shares. Inox CVA has established a price range of Rs 627 to Rs 660 per share for its IPO.
The company and its subsidiaries, namely Accord Estates, Iconic Property Developers, and Skyline Realty, will utilize the funds for repaying their borrowings. Additionally, the money will be allocated towards acquiring land or land development rights. It is important to note that the IPO of Motisons Jewellers solely involves the issuance of 2.74 crore equity shares and does not include any OFS component.
The net proceeds from the issue will be utilized by the company to repay their existing borrowings obtained from scheduled commercial banks, as well as to fund their working capital requirements and meet general corporate purposes.
(With Input from agencies)
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