The next IPOs to watch in October 2021
Tech startups, chemical manufacturing companies and restaurant chains, and many more, went public in 2021.
Many companies are also likely to be listed on national stock exchanges through an initial public offering (IPO) later this year.
At least 35 companies plan to launch IPOs in October-December, with the aim of raising around ??800 billion if market sentiment remains positive.
There were 42 IPOs in the first nine months of the year (including Aditya Birla Sun Life’s most recent IPO). These 42 companies raised up to ??670 billion in Indian markets to date.
This is an encouraging sign after a few hiccups from the previous exercise due to covid. The market has rebounded well. The Sensex is walking towards new records.
A positive market environment has given companies even more confidence to go public and take advantage of this opportunity. As a result, October is likely to be a busy month for IPOs.
Let’s take a look at the IPOs expected in October 2021.
Digital payments and financial services company Paytm wants to hit the market with its ??166 bn IPO at the earliest and most likely by the end of October.
The company had filed draft documents for its initial sale of shares with the market regulator on July 15, 2021.
According to the draft document, the company plans to increase ??83 billion new share issues and another ??83 billion via a sales offer (OFS).
The company proposed to use ??43 billion to develop and strengthen the Paytm ecosystem, in particular by acquiring consumers and merchants and offering them better access to technology and financial services.
Paytm plans to affect ??$ 20 billion for business initiatives, acquisitions and strategic partnerships and up to 25% of total funds raised through the general corporate purpose IPO.
2. Adani Wilmar
Fast consumer goods company (FMCG) Adani Wilmar, known for ‘Fortune’ edible oil, has filed its draft red herring prospectus (DRHP) with the market regulator to launch a ??45 billion IPOs.
The company is a major player in the Indian consumer goods segment and specializes in kitchen supplies including flour, pulses, sugar and rice.
Adani Wilmar is a joint venture between Adani Group and Wilmar, based in Singapore, which was established in 1999. The company is also the largest manufacturer of oleochemicals in India.
The objective of the IPO is to raise capital for the expansion of the company’s manufacturing facilities, early repayment of loans and also to finance strategic investments and acquisitions.
3. Aadhar housing finance
Blackstone Group private equity firm, Aadhar Housing Finance, seeks to raise ??73 billion via IPO.
The company is one of the largest affordable housing finance companies in the country. It meets the home financing needs of low income groups in society. The country has tried to allow millions of people to buy their first homes.
It has branches in 20 states and union territories, operating in approximately 12,000 locations across India with assets under management of ??114.3 billion. The company proposes to use the new products of the IPO to strengthen its capital base.
Blackstone acquired a 97.7% stake in Aadhaar Housing Finance in June 2019. The purchase included the entire stake held by the majority shareholders at the time – Wadhawan Global Capital and Dewan Housing Finance (DHFL).
4. Paradeep Phosphates
Leading fertilizer company Paradeep Phosphates last week received the green light from the market regulator to mop up funds via an IPO.
Fertilizer Manufacturing Company Seeks to Increase ??$ 12.6 billion through the issuance of new shares and the sale of over 120 million shares by its existing shareholders and promoters.
Currently, Zuari Maroc Phosphates (ZMPPL) owns 80.45% and the Indian government holds 19.55% of the company’s capital.
The proceeds of the new issue will be used to partially finance the acquisition of the fertilizer manufacturing plant in Goa, for debt payment and for general corporate purposes.
Paradeep Phosphates is mainly engaged in the manufacture, trade, distribution and sale of a variety of complex fertilizers such as diammonium phosphate (DAP) and NPK fertilizers.
Its fertilizers are marketed under brands such as “Jai Kisaan – Navratna” and “Navratna”.
5. Seven Island Expedition
Another IPO that is expected to hit the markets in October 2021 is Seven Islands Shipping.
It is a Mumbai-based crude oil transportation and maritime logistics company. He seeks to increase ??6 billion thanks to its public listing.
In accordance with its DRHP, the IPO will include a new issue worth ??4 billion. The remainder of the public offering will include an OFS by existing shareholders and promoters.
The company owns and operates 20 vessels registered in India. A total of 1.1 million metric tonnes of deadweight capacity is available.
The proceeds from the IPO will be used to purchase new vessels to transport crude oil.
6. Keventer Agro
Keventer Agro, supported by Mandala Capital, seeks to raise ??3.5 billion via a new share issue with an offer to sell 10.7 million shares by Mandala Swede SPV which holds a 6.16% stake in the company.
Keventer Agro is a Kolkata-based company which is one of the major players in the FMCG segment in India.
The company mainly specializes in packaged, dairy and fresh food products. It has over 90 products in its portfolio with the availability of many products in a variety of tastes and flavors.
It manufactures, conditions, markets and distributes products such as Frooti, Appy, B Fizz, Appy Fizz, Bailley, Smoodh, which are licensed to them under various franchise agreements.
The company plans to use the funds from the IPO for the repayment of certain debts, working capital requirements and general business objectives.
7. Arohan Financial Services
Kolkata-based microfinance lender seeks to raise ??8.5 billion via the IPO. However, several press reports indicate that the company could increase ??18 billion including a new issue of ??9.5 billion and a sale offer of ??8.5 billion.
Arohan is a non-bank finance company (NBFC) and is also active in microfinance serving under-penetrated segments of the market.
Arohan Financial, which offers microcredit to female borrowers in financially under-penetrated and low-income states, will use the new issue proceeds to increase its capital base.
Aside from these companies, here is a list of upcoming IPOs between October 2021 and December 2021:
The IPO market is booming in India. Will the trend continue?
The Indian economy is booming. India has great potential for demand due to the size of its population.
Satisfying such business opportunities with larger structures requires significant investments.
Companies with the capacity to generate and meet the demands of the economy go public and seek capital for future expansion.
Many companies are also raising capital following losses encountered during the Covid-19 pandemic.
Data suggests the companies raised US $ 4.6 billion in IPOs last year. Many financial companies believe this amount will be easily exceeded in 2021 as more companies opt for a public offering.
Additionally, actions taken by central banks to deal with the challenges of Covid-19 have pushed a plentiful amount of liquidity into global markets. Thus, the current time is considered to be the best for IPOs in the world.
At the same time, the markets show higher potential returns for the next few years, as the recovery is faster than expected.
According to industry experts, companies are going public due to the excellent performance seen in the stock markets and the higher participation of new investors, including high net worth individuals.
A State Bank of India (SBI) report suggested that more than 14.2 million new individual investors participated in the stock markets in 2020-2021.
Even as the pandemic continues to wreak havoc on the Indian economy, the national stock market has not been affected at all. In fact, the benchmark S&P BSE Sensex and Nifty stock indexes are performing better than ever at the moment.
Given the strong market performance, more recent IPOs have performed exceptionally well and more investors are eager to take advantage of this opportunity.
The combination of strong retail investor interest and liquidity has created an ideal environment for companies to go public.
(This article is syndicated from Equitymaster.com)
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