IPO boom! FabIndia, Aether, 5 others lined up to raise 10,000 cr via public offering

Initial public offering (IPO) activities in India seemed to have regained momentum as several companies rushed to file their draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI) to list their firms on domestic bourses. The IPO activities had dried up in the recent past amid a lack of investor confidence in the equity markets following the escalation of geopolitical tensions between Russia and Ukraine, which triggered volatility globally.

In a fresh development, seven firms, including big names like apparel retailer FabIndia and specialty chemical company Aether Industries, have received SEBI’s nod to raise funds via IPO route. The other companies that have got the go-ahead from the market regulator are Asianet Satellite Communications, Capillary Technologies India, Syrma SGS Technology, Sanathan Textiles, and Harsha Engineers International.

These firms had filed their preliminary documents with SEBI between December 2021 and February 2022 and received observations between April 27-30. In the regulator’s terms, the observation means the company concerned has received the approval to launch the IPO.

The approval came at a time when insurance major Life Insurance Corporation of India (LIC) has launched the country’s largest-ever IPO to raise around ₹21,000 crore through a public listing of shares on domestic exchanges. The IPO, which opened between May 4-9, will see the government selling a 3.5% stake in the insurer at the price band of ₹902-949 per share. The positive response to recently concluded IPOs of Campus Activewear and Rainbow Children Medicare also prompted companies to launch their public offerings.

Here's all you need to know about companies that received SEBI’s approval to float IPOs:

FabIndia: India’s leading ethnic wear brand FabIndia is expected to soon launch an IPO after SEBI approved the company’s Draft Red Herring Prospectus (DHRP) on Monday. The IPO will consist of both a fresh issue and an offer for sale (OFS) by existing shareholders worth up to ₹4,000 crore. As per the DHRP, the IPO will include a fresh issue of over ₹500 crore, and an OFS of 2.5 crore equity shares by promoters and investors, including Azim Premji’s Premji Invest.

Aether Industries: The Surat-based speciality chemicals manufacturer is expected to raise ₹1,000 crore through public offering. The offer consists of a fresh issue of equity shares aggregating to ₹757 crore and an OFS of up to 2,751,000 equity shares. Adding to it, the company may also consider raising ₹131 crore by issuing equity shares through a preferential offer.

Asianet Satellite Communications: The internet service provider has filed papers with SEBI to raise ₹765 crore through the initial share sale. The IPO consists of a fresh issue of equity shares worth ₹300 crore, and an offer for sale of up to ₹465 crore by Hathway Investments.

Syrma SGS Technology: The electronic manufacturing services firm is expected to garner between ₹1,000 core and ₹1,200 crore through IPO. It plans to raise ₹926 crore by issuing fresh shares, and an OFS of up to 33.69 lakh equity shares by Veena Kumari Tandon.

Sanathan Textiles: The yarn manufacturer plans to float IPO, which comprises fresh issue of equity shares worth up to ₹500 crore and an OFS of up to 1.14 crore equity shares by Dattani Family. The company may consider a pre-IPO placement of equity shares of up to ₹100 crore. As per the market sources, the issue size will be in the range of ₹1,200-1,300 crore.

Capillary Technologies (India): The software company, backed by Warburg Pincus and Sequoia Capital, eyes to raise ₹850 crore through IPO. It consists of a fresh issue of equity shares worth ₹200 crore and an OFS of ₹650 crore by Capillary Technologies International Pte Ltd. The company, which offers Artificial Intelligence (AI)-based cloud-native Software-as-a Solution (SaaS) products and solutions, may also consider a pre-IPO placement aggregating up to ₹20 crore.

Harsha Engineers International: The company, a manufacturer of precision bearing cages, aims to raise ₹755 crore through its IPO. The issue comprises a fresh issue of equity shares up to ₹455 crore, and an OFS of up to ₹300 crore by existing shareholders.