IPO Watch: These 4 open next week, to raise Rs 5,020 crore as market stays buoyant

IPO

After the launch of four initial public offerings (IPOs) this week, the primary market is set for more action with a slew of issues lined up this month.

Four more initial public offerings (IPOs)—Archean Chemicals Industries Ltd, Five Star Business Finance Ltd, Kaynes Technology India and Inox Green Energy Services Ltd—will hit the markets next week to cumulatively raise around Rs 5,020 crore.

Archean Chemicals and Five Star Business will both open for subscription on November 9 and close on November 11, while their anchor books open on November 7 and shares will be listed on exchanges on November 21. Kaynes Technology India Ltd's IPO opens on November 10 and closes on November 14. Inox Energy Services Ltd issue will open on November 11 and close on November 15.

"Indian market’s outperformance and strong fundamentals reflected by growth and corporate earnings have created a favourable atmosphere for good IPOs. Retail investors' enthusiastic participation in the market is another positive. Reasonably priced good IPOs will have a good response," said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The issues next week

Archean Chemicals is looking to raise around Rs 1,462 crore and the price band has been fixed at Rs 386-407 a share. The issue comprises a fresh issuance of shares worth Rs 805 crore and an offer for sale of 1.61 crore equity shares by promoters and investors. The proceeds from the issue will be used for redemption of non-convertible debentures.

Five Star Business Finance IPO is an offer for sale to raise Rs 1,960 crore. The price band has been fixed at Rs 450-474  a share. The South-based lender's share price is trading at Rs 525-530 per share in the unlisted market while the IPO price band is fixed at Rs 450-474 per share, about 10.6 percent below the current unlisted price. Its shares have dropped 35 percent in the grey market from the peak in October 2021.

Kaynes Technology IPO price band has been fixed at Rs 559-587 a share and the firm will raise around Rs 856 crore. The proceeds will be used to repay debts, fund capex for the expansion of existing manufacturing facilities and investment in its subsidiary.

Inox Green Energy Services Ltd will raise Rs 740 crore via a share sale. The issue comprises a fresh issue of Rs 370 crore and an offer for sale (OFS) of up to Rs 370 crore. The anchor investors bidding will open on November 10 and the scrip will list on November 23. The proceeds from the issue will be used to repay its debt and redemption of non-covertible debentures (NCDs).

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More in the pipeline

According to bankers, three more share sales may hit the primary market in mid-November, which includes engineering systems and solutions provider Uniparts India Ltd, automobile dealership chain Landmark Cars Ltd and Premji Invest-backed Gold Plus Glass Industries Ltd. Dates for opening and schedule and price band are expected to be out next week.

Grey market indicators

Grey market premiums (GMP) for four IPOs that opened this week—DCX Systems Ltd, Fusion Micro Finance Ltd, Bikaji Foods International Ltd and Global Health Ltd—are trading marginally higher, which indicates shares are likely to open near their issue prices.

DCX Systems GMP is trading at Rs 75 a share, Fusion Micro Finance at Rs 4, Bikaji Foods International at Rs 28 and Global Health at Rs 20, according to dealers.

DCX Systems IPO was subscribed over 69 times, with the QIBs portion witnessing over 84 times subscription and the retail portion nearly 62 times. Fusion Micro Finance was subscribed three times on the final day, Global Health received just 0.49 times response while Bikaji Foods IPO was subscribed 1.48 times on day two.

"Retail and HNI investors are willing to put liquidity in selective issues whose prospects are good and whose grey market premium is high. This could continue till some IPOs get listed at much lower than the grey market premium," said Deepak Jasani, Head of Retail Research, HDFC Securities.

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