Dodla Dairy and Krishna Institute of Medical Sciences (KIMS Hospitals) will debut on the bourses on June 28 in the last listings of the first half of the year 2021.
Experts expect Dodla Dairy, an integrated dairy company in South India, to list with 15-25 percent over the issue price of Rs 428 given the reasonable pricing and healthy investor response to the public offer. KIMS Hospitals could start with 10-25 percent of gains over the IPO price of Rs 825 per share.
The Rs 520-crore public offer of Dodla Dairy closed for subscription on June 18 after being subscribed 45.62 times. The IPO comprised a fresh issue of Rs 50 crore and an offer for sale of Rs 470 crore by selling shareholders. The net proceeds from the fresh issue will be used for repaying debt and to meet capital expenditure requirements.
"The grey market is indicating chances of decent listing gains for Dodla Dairy. Dodla Dairy being the third-largest player in terms of milk procurement per day is well placed in comparison to its peers to do well in the long run. However, in general, dairy stocks have not rewarded the investors much or have not exhibited extraordinary results in the long run," Gaurav Garg, Head of Research at CapitalVia Global Research told Moneycontrol.
To Know All IPO Related News, Click Here
Reasonable issue price and small issue size should help Dodla Dairy in getting decent listing gains. One can expect around 15 to 20 percent gains on the listing day, Garg said.
Dodla Dairy traded at a premium of Rs 95 a share in the grey market, i.e. a price of Rs 523 against the issue price of Rs 428, the IPO Watch data showed.
The grey market is an unofficial platform for trading in equity shares and generally, trading in the grey market starts after the announcement of the issue price.
Considering a healthy response from investors, Prashanth Tapse, VP Research at Mehta Equities, believes Dodla Dairy will list at least Rs 510, which translates to 19 a percent premium over the upper end of the IPO price of Rs 428.
"Decent listing gain seems to be justified as the issue was well priced with attractive valuation when compared to other listed dairy peers and given the healthy prospects of the dairy sector going forward. The issue seems to have come at right time to tap investors demand," Tapse said.
Dodla Dairy is the third largest company in terms of raw milk procurement, with an average procurement of 1.03 million liters per day (MLPD) as of March 2021.
Its operations processes raw milk into packaged milk and manufactures dairy-based value-added products (VAPs) at 13 plants with an aggregate installed capacity of 1.7 MLPD.
The Rs 2,144-crore IPO of KIMS Hospitals, one of the largest corporate healthcare groups in Andhra Pradesh and Telangana in terms of number of patients treated and treatments offered, was subscribed 3.86 times between June 16 and 18. The final offer price has been fixed at Rs 825 per equity share.
"KIMS issue looks set to give around 20 to 25 percent listing gains to the investors. The market sentiments are upbeat after a better-than-expected performance from Shyam Metalics and Sona Comstar," said Garg.
Yash Gupta, Equity Research Associate at Angel Broking, expects KIMS IPO to list at EV/EBITDA of around 20 times, which would be between Rs 900 and Rs 950.
The company operates nine multi-specialty hospitals under the 'KIMS Hospitals' brand, with an aggregate bed capacity of 3,064, including over 2,500 operational beds as of March 2021, which is 2.2 times more beds than the second-largest provider in Andhra Pradesh and Telangana.
The company offers a comprehensive range of healthcare services across over 25 specialties and super specialties, including cardiac sciences, oncology and mother and child care.
"Considering soft investors' response to KIMS IPO, allotted investors can expect 7-10 percent premium on the listing. The muted listing gain seems to be justified as the issue was fully priced in terms of comparison with listed peers' valuations," said Prashanth Tapse.
KIMS shares were available for trade a premium of Rs 110—a price of Rs 935 in the grey market over the issue price of Rs 825, the IPO Watch data showed.
The offer comprised a fresh issue of Rs 200 crore and an offer for sale of up to Rs 1,944 crore by investor General Atlantic Singapore KH Pte Ltd and other existing selling shareholders, including promoter Bhaskara Rao Bollineni.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.