The initial public offering (IPO) lane will be busy in November with five companies, including Tata Technologies and Indian Renewable Energy Development Agency Ltd, tapping the primary market next week to raise over ₹7,300 crore collectively.
The other three companies whose maiden public issues are ready to open are Fedbank Financial Services, Flair Writing Industries, and Gandhar Oil Refinery India.
Three firms — ASK Automotive, Protean eGov Technologies, and ESAF Small Finance Bank — launched their public issues earlier this month. Further, IPOs of Honasa Consumer, which owns FMCG brands Mamaearth, and household products and stationery manufacturer Cello World concluded in the first week of the month.
V Prashant Rao, Director & Head-ECM, Investment Banking at Anand Rathi Advisors, attributed several factors to the hectic IPO activity next week, including strong post-listing returns (average 30 per cent) for recent public issues and robust macros.
"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.
Overall, the Indian IPO market witnessed 31 initial share sales collecting ₹26,300 crore in the first half of FY24. This was a decline of 26 per cent from the ₹35,456 crore mobilised by 14 IPOs during the same time in 2022–23.
However, Rao believes that the second half of the current financial year (FY24) will see good quality companies that have been priced reasonably to launch their IPOs.
The initial share sale of state-owned Indian Renewable Energy Development Agency (IREDA) will open for public subscription during November 21-23, while the IPOs of the remaining four companies will open on November 22 and conclude on November 24.
Tata Technologies' IPO is entirely an Offer for Sale (OFS) of 6.08 crore equity shares. Under the OFS, Tata Motors will offload an 11.4 per cent stake, private equity firm Alpha TC Holdings will sell a 2.4 per cent stake, and Tata Capital Growth Fund I will do away with 1.2 per cent of shareholding.
This will be the first company from the Tata Group to float an initial share sale in nearly two decades. Tata Consultancy Services was the last IPO from the group in 2004.
The company has set a price band of ₹475-500 per share for its ₹3,042 crore IPO.
IREDA, which is looking to collect ₹2,150 crore through its IPO, has set a price price band of ₹30-32 per share.
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The company would issue up to 40.31 crore fresh shares to mobilise around ₹1,290 crore at the upper end of the price band. Besides, the Government of India, currently the sole shareholder, will offer up to 26.88 crore shares in an OFS to collect ₹860 crore.
Federal Bank's arm Fedbank Financial Services' ₹1,092 crore issue consists of a fresh issue of equity shares to the tune of ₹600 crore and an OFS of 3.51 crore shares worth ₹492 crore.
The price band has been fixed at ₹133-140 per share for the maiden public issue of the retail-focused non-banking finance company (NBFC).
The ₹593 crore IPO of pen maker Flair Writing Industries comprises a fresh issue of equity shares aggregating up to ₹292 crore and an OFS of equity shares worth up to ₹301 crore by promoters and promoter group entities. The company announced a price band of ₹288-304 a share for its issue.
The IPO of Gandhar Oil Refinery is a combination of a fresh issue of 1.79 crore shares aggregating to ₹302 crore and an OFS of 1.18 crore shares worth ₹198.69 crore. The price band is set at ₹160-169 per share.