Are Chemplast Sanmar and Aptus Value Housing staring at muted listings?

"Post CarTrade listing performance which was relatively disappointing even after witnessing healthy subscription demand will put Chemplast Sanmar listing under test. Considering lower-than-expected subscription demands to its initial public offering (IPO) and considering the weakness in secondary markets especially in Mid & Small Cap counters, we expect muted listing as risk concerns are more compared to positive rationales," Prashanth Tapse, VP Research at Mehta Equities told Moneycontrol.

"Muted listing seems to be justified as the issue was aggressively priced & two-third of the offer was secondary by way of offer for sale. New investors will always remain concerned when it comes to applying for an IPO which has a large portion of an offer for sale," he said.

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The IPO comprised a fresh issue of Rs 1,300 crore by the company, and an offer for sale of Rs 2,550 crore by promoters, Sanmar Holdings and Sanmar Engineering Services. The final price has been fixed at Rs 541 per equity share.

"The market does not appear to be too enthusiastic about IPOs, as the latest listing did not go as planned," said Gaurav Garg, Head of Research at CapitalVia Global Research.

Aptus Value Housing Finance

Aptus Value Housing Finance is an entirely retail focussed housing finance company, primarily serving low and middle-income self-employed customers in the rural and semi-urban markets of India. It is one of the largest housing finance companies in south India in terms of assets under management (AUM), as of March 2021. Its AUM increased at a CAGR of 34.54 percent during FY19-FY21 to Rs 4,067.76 crore in March 2021.

"Considering profit-taking mood in primary and secondary markets with overheated IPO fever, there could be lower single-digit or discount listing in Aptus Value. The same trend was seen in CarTrade listing on Friday despite healthy subscription demand," said Prashanth Tapse, VP Research at Mehta Equities.

"Muted listing seems to be justified as the issue was fully priced in for new investors with a business segment which is overcrowded with many players tapping the growth rising competition in the short term," he added.

The initial public offering of Aptus Value received strong demand from investors as it was subscribed 17.20 times during August 10-12. The qualified institutional buyers' portion was booked 32.41 times and the portion set aside for non-institutional investors was subscribed 33.91 times, while retail book was subscribed 1.35 times.

The offer had comprised of fresh issue of Rs 500 crore, and an offer for sale of Rs 2,280 crore shares by shareholders Padma Anandan, JIH II, LLC, Aravali Investment Holdings, Madison India Opportunities IV, GHIOF Mauritius, KM Mohandass HUF, Saurabh Vijay Bhat and R Umasuthan.

Aptus Value which provides loans to individuals buying residential properties as well as loans against properties to self-employed consumers focused in the rural and semi-urban marketplaces of India had raised a total Rs 2,780 crore through IPO.

"Investors interest in IPOs has decreased as a result of certain debutants disappointing performances recently, though Aptus Value Housing is a good long-term proposition," said Gaurav Garg.

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