Four IPOs aim to raise over Rs 4,500 crore next week

2022 has been quiet for IPOs after a record fundraising last year

After a slow start this year, as many as 4 initial public offerings (IPOs) are looking to raise over Rs 4,500 crore next week.

These companies are Bengaluru-based DCX Systems Ltd, cardiologist Dr Naresh Trehan-promoted Global Health Ltd, Bikaji Foods International Ltd and Fusion Micro Finance Ltd.

Analysts said the Indian primary markets seem to be firing up again. A lot of other IPOs are also in line and their opening will depend on how these 4 IPOs garner money and open on listing.

"After a three-week break, we are about to see action returning in the IPO space. Steady secondary markets and decent listing gains in the recently listed IPOs have led to this rush. Investors will do well to evaluate the pricing of IPOs before getting excited just by the grey market premium," said Deepak Jasani, Head of Retail Research, HDFC Securities.

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2022 has been quiet for IPOs after a record fundraising last year. For the first three months, just three firms came up with the IPOs and post-March around 19 firms raised money through initial share sales. So far in 2022, firms raised a total of Rs 44,085 crore via share IPOs, data from primary market tracker Prime Database shows. In 2021, 63 IPOs had raised over Rs 1.19 lakh crore.

The cooling-off of the primary market was the result of volatile markets with expectations of rate hikes by global central banks to tackle higher inflation. The Ukraine-Russia tensions, energy crises in Europe and fears of recession also dampened sentiments.

Although these challenges still exist globally, domestic markets will have the least impact, analysts expect. Indian markets have outperformed many global markets this year. Year to date, both Sensex and Nifty gained around 2 percent each. However, among global markets, Dow Jones lost 13 percent, Nasdaq dropped 30 percent, Hang Seng 27 percent, Kospi 26 percent, Philippines 16 percent, Taiwan 25 percent, Nikkei 14 percent and Tokyo's Topix fell 5 percent.

"The Indian primary markets, which have been rather quiet this year, are attempting to regain the momentum. We will see a wave of IPOs in the first week of November after remaining mute for more than a year. The increase in activity can be ascribed to more stable overall market conditions as well as several successful recent listings, which have bolstered sentiments to some extent," said Manan Doshi, Co-founder of unlistedarena.com, which deals in unlisted shares.

The issues

DCX Systems Ltd IPO opens on October 31 for subscription and closes on November 2, with a price band of Rs 197-207 a share. The shares will be allotted on November 7 and credited to the depository on November 10. The scrip will be listed on the exchanges on November 11.

DCX Systems has cut its issue size to Rs 500 crore from Rs 600 crore earlier. The firm now plans to raise Rs 400 crore via the fresh issue and Rs 100 crore via an offer for sale (OFS) by its promoters and shareholders.

The Fusion Micro Finance issue will open on November 2 and close on November 4. The firm has set a price band of Rs 350-368 a share and aims to raise around Rs 1,100 crore. The issue consists of a fresh issue of Rs 600 crore and an OFS of up to Rs 500 crore.

The Global Health Ltd, which operates and manages hospitals under the Medanta brand, and Lighthouse-funded Bikaji Foods International Ltd IPOs will open on 3 November and close on 7 November. Both firms' anchor bids will start on November 2 and the issues will list on exchanges on November 16.

Global Health has set a price band of Rs 319-336 a share and will raise around Rs 2,200 crore. The IPO consists of a fresh issue of Rs 500 crore and an OFS of up to 50.76 million shares by shareholders and promoters — 50.66 million by Anant Investments and one lakh shares by Sunil Sachdeva (jointly held with Suman Sachdeva). The firm will list on exchanges on November 16.

Bikaji Foods is a pure OFS and, according to bankers, will raise around Rs 900 crore. The OFS comprises up to 29.37 million shares by its existing shareholders and promoters. The price band of the issue is expected to be announced next week.

Currently, 64 IPOs worth over Rs 94,000 crore have got the Securities Exchange Board of India's (SEBI) approval to raise funds. Around 45 firms worth Rs 65,000 crore have filed draft papers since last year and are awaiting SEBI's approval.

"The IPO pipeline continued to remain strong since the past year but the overhang volatility dissuaded the companies largely. For a successful listing, a stable broader market is an essential ingredient. Going forward, if the broader markets remain in favour, we may see a continued flow of IPOs for the rest of the year," Doshi added.