IPO Rush: 6 cos seek to raise over Rs 10,000 crore

Half-a-dozen companies — Sona BLW Precision Forgings, Shyam Metalics, India Pesticides, KIMS Hospital, Clean Science & Technology, and Dodla Dairy — will hit the primary market in the next four weeks to raise collectively Rs 10,500 crore in initial share sales, while another six firms are finalising plans to raise funds in the next two months.

The Rs 5,550-crore issue of Blackstone-backed Sona BLW Precision Forging will open for subscription on June 14 at a price band of Rs 285-291 per share. The auto component maker’s public issue comprises fresh issue of equity shares of up to Rs 300 crore and offer-for-sale of up to Rs 5,250 crore by the Blackstone Group.

Steel manufacturing company Shyam Metalics and Energy also has announced the launch of its ?909 crore IPO, which will open on June 14. The price band for the issue has been fixed at Rs 303-306 per share. The public issue comprises a fresh issue of up to Rs 657 crore, and an offer for sale up to Rs 252 crore by promoters.

Apart from these two companies, KIMS Hospitals, Dodla Dairy and India Pesticides are planning to raise Rs 800 crore each through IPOs in the next two to three weeks, while Clean Science & Technology is likely to launch its maiden Rs 1,500-crore IPO in the first week of July.

“This year could be a record year in terms of fundraising through IPOs,” said V Jayashankar, head of equity, Kotak Investment Banking. “The buoyant secondary markets and excess liquidity that institutional investors are sitting on have made more companies rush to raise funds through the primary market.”

Since March this year, eight companies including Seven Iceland Shipping, Dodla Dairy, Arohan Financial Services, KIMS Hospitals, India Pesticides, Rolex Rings, Glenmark Life Sciences, and Utkarsh Small Finance Bank received Sebi approvals to float IPOs.

Another 25 companies have filed their draft red herring prospectuses (DRHP) with the market regulator to raise more than Rs 50,000 crore. Foodtech platform Zomato filed its DRHP for Rs 8,250 crore. Aadhar Housing Finance is planning a Rs 7,000-crore IPO while Nuvoco Vistas Corporation filed DRHP to raise around Rs 5,000 crore.

“There is enough investor appetite for IPOs provided they are priced well,” said Ajay Saraf, executive director at ICICI Securities. “The success of a recent IPO and its returns will prompt investors to put more money into the primary market.”

So far in 2021, 17 companies have raised Rs 17,500 crore through IPOs. The last IPO was from Microtech Developers, which raised Rs 2500 crore in early April. But in the last two months, not a single IPO was launched except an InvIT from Power-Grid Infrastructure, raising about Rs 7,735 crore.