After muted IPO activity in the first half of the current financial year, the primary market in India seems to be regaining momentum, thanks to the recovery in the secondary market. The secondary market has seen sharp recovery since July this year after early slide, with the BSE Sensex and the NSE Nifty gaining more than 15% in the last five months, aided by strong rally in IT, energy, FMCG, and metal stocks as well as foreign fund inflows despite talks of recession and a downward revision of the economy’s growth. In the first half of FY23, as many as 14 companies raised ₹35,456 crore through IPOs, which is 32% lower than the ₹51,979 crore raised by 25 firms during the same period last year. Of this, more than 50% (₹20,557 crore) was raised by the state-owned insurance behemoth Life Insurance Corporation (LIC), which was the largest IPO ever in India.
As many as four Initial Public Offerings (IPOs) - DCX Systems, Fusion Micro Finance, Global Health (Medanta), and Bikaji Foods International - are going to hit the primary market this week. The public issue of DCX Systems, a manufacturer of cables and wire harness assemblies, will be the first IPO to open on November 2, followed by financial services company Fusion MicroFinance on November 2, whereas hospital chain Global Health, which operates under the brand 'Medanta', and Rajasthan-based Bikaji Foods will launch their offers on November 3.
These four IPOs aim to raise around ₹4,500 crore from their respective public offers, which is a mix of fresh equity shares and an offer for sale (OFS). The IPO size of DCX Systems is ₹500 crore, Fusion MicroFinance to raise ₹1,104 crore, whereas Global Health and Bikaji Foods aim to garner ₹2,206 crore and ₹900 crore, respectively, by public listing of shares on the domestic exchanges.
Here’s all you need to know about upcoming IPOs:
The ₹500 crore IPO of DCX Systems will open for public subscription on October 31, 2022. The three-day public offer, which is a mix of fresh equity shares and an OFS by existing shareholders, will close on November 2, while shares of the homegrown defense sector company are likely to list on the BSE and the NSE on November 11. The Bengaluru-based company plans to raise ₹400 crore via fresh issuing of equity shares of the face value of ₹2 each, as against ₹500 crore proposed earlier. Besides, it will garner up to ₹100 crore through OFS as promoters - NCBG Holdings Inc and VNG Technology – would trim their shareholding in the company.
The price band of the offer has been fixed at ₹197 to ₹207 per equity share of face value of ₹2 each. To subscribe, investors can make a minimum bid of 72 equity shares and in multiples of 72 equity shares thereafter.
The company intends to use IPO proceeds from fresh issue for repayment of loans, funding working capital requirements, and investment in its wholly owned subsidiary, Raneal Advanced Systems Private. The capital will be also used to fund its capital expenditure expenses and meet general corporate purposes.
Ahead of the IPO, the Bengaluru-based company has raised ₹225 crore from anchor investors. The company has allotted 1,08,69,564 equity shares at ₹207 apiece to 12 anchor investors including BNP Paribas, Volrado Ventures, Theleme, HDFC Large & MidCap, Motilal Oswal MF, Quantum, Resonance, Cohesion, etc.
The New Delhi-headquartered microfinance company plans to raise ₹1,104 crore via IPO, which comprises fresh issue of equity shares worth up to ₹ 600 crore and OFS of up to 13,695,466 equity shares. The offer will open on November 2 and close on November 4, 2022. The anchor investor bidding Date is November 1.
The price band of the offer has been fixed at ₹350 to ₹368 per equity share of face value of ₹10 each. Bids can be made for a minimum of 40 equity shares and in multiples of 40 stocks thereafter.
The offer comprises an offer for sale of up to 6.5 lakh equity shares by Devesh Sachdev (founder and chairman of the MFI); up to 1 lakh equity shares by Mini Sachdev (wife of Devesh Sachdev), and up to 14 lakh equity shares each by Honey Rose Investment and Creation Investments Fusion, LLC, owned by Warburg Pincus. Besides, the Dutch impact investor Oikocredit Ecumenical Development Co-operative Society, and Global Financial Inclusion Fund will also pare their stake in the company via OFS.
Backed by global private equity major Warburg Pincus, Fusion is one of the youngest companies (in terms of getting an NBFC-MFI license) among the top NBFC-MFIs in India in terms of AUM as of June 30, 2022, according to CRISIL. It has a significant footprint across India with 2.90 million active borrowers, 966 branches, and 9,262 permanent employees spread across 377 districts in 19 states and union territories in India, as of June 30, 2022.
Global Health (Medanta)
The cardiologist Naresh Trehan-promoted Global Health, which runs hospitals under the Medanta brand, will open its initial public offering (IPO) on November 3, 2022. The company intends to raise ₹2,205 crore via IPO, which closes on November 7. The price band for the IPO has been fixed at ₹319-336 a share.
The offer includes a fresh issue of ₹500 crore and an offer for sale (OFS) of up to ₹1,705 crore via the sale of 5.08 crore equity shares by the company's shareholders and promoters. The top U.S. private equity firm Carlyle, which held a 25.64% stake in the multi-speciality hospital chain, will sell 5.66% (an aggregate of 14,339,005 equity shares) shareholding in the company.
The IPO proceeds will be used to repay a debt of ₹375 crore borrowed to build Lucknow and Patna hospitals. Medanta currently operates five hospitals in Gurugram, Ranchi, Lucknow, Indore, and Patna, while it is constructing a hospital in Noida.
Bikaji Foods International
The fast-moving consumer goods (FMCG) company, which sells products under six principal categories such as bhujia, namkeen, packaged sweets, papad, western snacks, and other snacks, plans to raise about ₹900 crore from the issue. The IPO will open on November 3 and will close on November 7. The price band for the issue is expected to be announced later this week.
The issue is purely an offer for sale (OFS) of up to 29,373,984 equity shares by existing shareholders - Shiv Ratan Agarwal, Deepak Agarwal, India 2020 Maharaja, Intensive Softshare, and IIFL Special Opportunities.
As per the offer document filed with SEBI, 50% of the issue will be reserved for QIBs, 15% for NIIs, and the remaining 35% for retail investors.
JM Financial, Axis Capital, IIFL Securities, Intensive Fiscal Services, and Kotak Mahindra Capital Company are the lead managers for the IPO.
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