Dalal Street ready for Rs 14,000-cr IPOs

The IPO lane is getting busy as at least seven companies, including Lodha Developers and HDFC Mutual Fund, are expected to hit the capital market in the coming week to raise over Rs 14,000 crore. The first among the lot would be TCNS Clothing, which sells its products under W, Aurelia and Wishful brands, that will launch its Rs 1,125-crore initial share-sale this week.

While six others -- Lodha Developers, HDFC Mutual Fund, Nekkanti Sea Foods, Flemingo Travel Retail, Patel Infrastructure and Genius Consultants -- are expected to launch their respective IPOs in the coming week, according to merchant banking sources. Together, these seven companies are aiming to raise more than Rs 14,000 crore, they added. These companies are coming out with initial public offers (IPOs) to raise funds for business expansion plans, repayment of loans and to support working capital requirements.

Further, many firms are opting the IPO route to give partial exit to their existing shareholders including private equity and venture capital firms. By taking the IPO route, companies will also achieve the benefits of listing the equity shares on the bourses, which enhances their brand name. "These companies have already secured markets regulator Sebi's approval to float IPO and now they are expected to launch their initial public offers next month," a merchant banker said.

Moreover, 18 companies have already raised Rs 23,670 crore through their respective IPOs in January-June this year, which is higher than Rs 12,000 crore garnered by 13 issuers in the first six months of 2017. Individually, realty major Lodha Developers plans to raise an estimated Rs 5,500 crore through its IPO, sources said.  This includes fresh shares worth Rs 3,750 crore besides an offer for sale of 1.8 crore shares by the promoters. Also, it aims to raise about Rs 750 crore out of the proposed issue through a pre-IPO placement of 95 lakh fresh shares, as per the draft papers filed with Sebi. 

Besides, the public issue of HDFC Asset Management Company, the country's largest mutual fund firm, may garner Rs 3,500 crore, sources said. Going by the draft papers, the fund house's IPO offers up to 2.54 crore equity shares of the fund house through an offer for sale of 85.92 lakh shares by HDFC and up to 1.68 crore shares by Standard Life. Leading duty-free and travel retail operator Flemingo will issue fresh shares worth Rs 2,423 crore besides an offer for sale of 11,29,500 shares by one of its subsidiary Flemingo Duty Free Shop Mumbai Pvt Ltd. Sources said that the firm will raise Rs 2,600 crore via IPO.

Nekkanti Sea Foods' Rs 750-crore IPO comprises fresh issuance of shares worth Rs 250 crore, besides, an offer for sale of up to 80 lakh equity shares by the existing shareholders. Patel Infra's IPO will see sale of equity shares worth Rs 400 crore, while Genius Consultants' IPO comprises fresh equity worth Rs 170 crore, besides, one million shares of promoter Rajendra Prasad Yadav.

"The IPO market is buoyant for good quality company issues which are priced cautiously. There is investor appetite for companies which price their IPOs keeping money-on-table for investors," J Kalyaniwala, vice president of investment banking at Prabhudas Lilladher said. Experts said that proactive regulatory environment coupled with uplifted investor sentiment has helped the IPO market.

Further, Sebi, in its board meeting last month, had decided to reduce the timeline for announcement of initial share-sale price band, which is further going to aid the IPO market. Under the new rules, the timeline for announcing price band for initial share-sale offer will be reduced to two days from the current five days.