- By Aditya Pratap Singh
- Mon, 25 Nov 2024 09:22 AM (IST)
- Source:JND
Upcoming IPO In December 2024: Merchant bankers said that the primary market will remain strong with at least 10 companies, including supermarket major Vishal Mega Mart and Blackstone-owned diamond grading firm International Gemological Institute (India) Ltd, expected to raise a combined Rs 20,000 crore next month. They said that education-focused NBFC Avanse Financial Services, TPG Capital-backed Sai Life Sciences, hospital chain operator Paras Healthcare and investment bank DAM Capital Advisors are also among the companies planning to launch their IPOs in December.
The companies aim to raise a total of Rs 20,000 crore through their public issues. These IPOs will be across sectors and deal sizes and will include both fresh issuances and offers for sale. Trivesh D, COO of online brokerage house TradeJini, told PTI that the Maharashtra election results and UP Lok Sabha by-poll results had generated positive market sentiment, which could boost IPO activity and fundraising efforts. He said 2024 has been a strong year for IPOs, but some recent issues have struggled in the secondary market, highlighting the recurring challenge of pricing during bull runs, when issuers often aim for higher valuations.
At the moment, with election-related funds coming back into the market and the grey market becoming active again, the IPO space has gained some momentum, he said.
Companies are tapping the primary market to provide an exit route to existing shareholders, raise funds for expansion plans, repay debt and support working capital requirements. According to the updated draft red herring prospectus (DRHP), Vishal Mega Mart plans to issue an Rs 8,000 crore IPO, which will be entirely an offer for sale (OFS) of shares by promoter Samayat Services LLP, with no fresh issue of equity shares.
The Gemological Institute hopes to raise Rs 4,000 crore through the IPO. The draft papers showed that the initial share sale consists of a fresh issue of equity shares worth Rs 1,250 crore and an OFS of Rs 2,750 crore by Blackstone affiliate BCP Asia II Topco Pte Ltd.
Avans Financial Services aims to launch a Rs 3,500 crore IPO. This consists of a fresh issue of equity shares worth up to Rs 1,000 crore and an OFS of up to Rs 2,500 crore by selling shareholders. The company, promoted by Olive Vine Investment Ltd, an affiliate of private equity major Warburg Pincus, proposes to use the funds to increase its capital base for future needs.
In addition, diagnostic chain Suraksha Diagnostics, packaging equipment maker Mamta Machinery, and Transrail Lighting will release their respective public issues next month.
In addition, 75 companies, including Hyundai Motor India, Swiggy, NTPC Green Energy, Bajaj Housing Finance, Ola Electric Mobility, and FirstCry parent BrainBees Solutions, have already collectively raised about Rs 1.3 lakh crore through the mainboard. This was much higher than the Rs 49,436 crore raised by 57 firms through this route in the whole of 2023.
The primary market is seeing strong interest from both issuers and investors across sectors.
Going forward, more than 30 IPOs are expected to come in the coming month. This huge pipeline could strain liquidity and the market’s ability to absorb them, especially if foreign investors continue to pull out funds, said Saurabh Patwa, head of research and portfolio manager at Quest Investment Advisors.
In addition, IPO investors have made significant gains in the last five financial years. Trivesh said 236 IPOs were launched between FY21 and FY25, resulting in an average listing gain of 27 per cent for the retail segment, and the current gain has risen to 105 per cent (as of October 31, 2024).
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(With PTI's Inputs)