In the first half of 2020, the initial public offering (IPO) market was severely impacted by the coronavirus pandemic. But by summer, IPO activity had surged again, and since July, 13 companies launched their IPOs to raise funds. Three of these IPOs subscribed more than 150 times as the benchmark indices surged to record levels. In fact, almost all other companies clocked returns for their investors by rising far over their issue price. Companies from the IT, food, and beverages (F&B), and BFSI sectors dominated the IPO calendar for 2020.
That momentum carried through into 2021 so far. The Indian IPO market had its busiest quarter in a long time with 17 successful IPOs so far. In fact, 14 of the 17 IPOs this year are still in profit, with some of them generating a return of over whopping 350% (aka Nureca).
The party is not over yet though. There is still a long list of upcoming IPOs for 2021, as a host of companies plan on tapping Dalal Street for much-needed capital.
If this is your first foray into the world of initial public offerings, check out our IPO guide to learn what IPOs are, who are IPOs for, how to judge an IPO, and the risks and rewards of doing so. At Arihant, we always recommend investing for long-term growth. So, if you “miss out” on an IPO listed above, don’t fret. Have a long-term mindset. If it is a solid business, you don’t have to be first in line to buy.
Here is a list of few companies that are expected to launch their IPOs (aka go public) in 2021. Right now, that list includes potential blockbuster offerings such as Zomato, a popular food-delivery app, and the big bang ₹70,000 Cr Life Insurance Corporation of India (LIC) IPO, India’s largest insurance company owned by the Government of India.
Aditya Birla Sun Life AMC
Industry: BFSI (Asset Management Company)
Aditya Birla Sun Life Mutual Fund is a joint venture between the Aditya Birla Group and the Sun Life Financial Inc of Canada and is the fourth largest AMC of India with an asset under management of ₹2.69 lakh crore as of March 2021.
Aditya Birla Capital has approved the sale of up to 28,50,880 equity shares of the face value of ₹5 each held in ABSLAMC out of the total paid-up share capital of 28,80,00,000 equity shares. The IPO will be conducted as an offer for sale in which two promoters will divest their shares. Through the maiden offering Canadian firm Sun Life Financial will divest its 12.56% holding, while Indian partner Aditya Birla Capital (ABCL) will sell a little less than a %.
During the budget session of 2021, Finance Minister Nirmala Sitharaman announced that the IPO of LIC would launch during FY22. There would hardly be an Indian who does not have the behemoth LIC. In fact, your elders or relatives must have taken at least one life insurance policy from LIC, India’slargest insurer established in the year 1956 and owned by the government of India. LIC commands 66% of the total market share. In the fiscal year 2021, LIC collected the highest-ever premium of ₹1.84 trillion.
The government’s decision to sell part of LIC’s shares has created a lot of hype in the market. The government is planning to raise between ₹80k to 100k crores from divest of LIC. Given that the total market valuation of LIC is ₹12-15 lakh crore, the IPO size will be 6-7 % of its total valuation and it is going to be the largest IPO in the history of the Indian stock market.
Industry: IT-Food Delivery
Zomato is a restaurant aggregator and food delivery company founded in 2008 as Foodiebay and later rebranded to Zomato in 2010. It is India’s largest food-tech company backed by Info Edge India Ltd, which is the largest shareholder controlling 18.5% of the company.
As a part of its draft offer, Zomato said that the company will be issuing fresh equity shares worth ₹7,500 crores, along with the company’s early backer Info Edge India Ltd selling its stake worth ₹750 crores in Zomato’s upcoming public offering.
Nykaa was founded in 2012 by Falguni Nayar, former managing director of Kotak Mahindra Investment Bank. Since then, Nykaa has quickly emerged as India’s largest beauty destination with over a million customers across the country. The company offers over two thousand brands and has over 200,000 products on its website that include makeup, skincare, haircare, fragrances, personal care, luxury, and wellness products for women and men
Mumbai-based beauty and lifestyle retailer company Nykaa has already selected Kotak Mahindra Capital Co and Morgan Stanely for their IPO run. The company aims to raise between $500-750 million from IPO at a valuation of around $3.5-4 billion. Nykaa is said to be looking to go public by the end of this financial year and could file the draft red herring prospectus (RHP) for the IPO by June 2021.
Industry: BFSI (Insurance Broker)
Policybazaar Insurance is a Web Aggregator Private Limited incorporated on September 25, 2014, it offers a platform that allows customers to compare auto, health, life, and personal insurance policies. The portal hosts more than 10 crore visitors a year and sells 400,000 insurance policies each month, according to its website. The firm has been seeking to go public before the end of this year.
The country’s largest insurance web aggregator is set to list on the stock exchange via a ₹3,700Cr initial public offering, which will see it dilute almost 15% stake while seeking a valuation of almost $3.5 billion. The firm is planning to file a draft prospectus by the end of June this year for its initial public offering.
Medplus Health Services
Medplus Health Services opened its first pharmacy store in February 2006 in Hyderabad. With over 1500+ pharmacy stores, it’s the second-largest pharmacy retail chain throughout the country. In the year of 2015 med plus launched its online pharmacy and general store and quickly grew as the biggest E-pharmacy. Its stores retail medicines, nutrition products, FMCG, and OTC products.
New York-based private equity investors Warburg Pincus and PremjiInvest have invested in MedPlus Health Services. Now, the company is planning to raise funds between ₹1800-₹2000 cr through IPO in the same financial year and the company has already selected Axis Capital, Nomura, and Edelweiss Financial Services.
Pune-based diagnostics chain Krsnaa Diagnostics plans to launch a ₹1,200 crore IPO and has already filed a draft RHP with market regulator Securities and Exchange Board of India (Sebi). The company runs over 1,800 diagnostic centres across 13 states as of December 31, 2020, covering all tests under radiology and pathology. For the nine months ended December 31, 2020, Krsnaa Diagnostics reported a profit of ₹195 crores, while revenue from operations stood at ₹300 crores.
As per its DHRP, the IPO comprises a fresh issue of shares worth ₹400 crores and an offer of sale (OFS) of 9,416,377 equity shares of a face value of ₹5 apiece by existing shareholders and promoters.
The company plans to use ₹150.8 crores from the proceeds from the issue for setting up diagnostics centres in Punjab, Karnataka, Himachal Pradesh, and Maharashtra. The remaining amount will be used for repayment and/or pre-payment in full or in part of certain borrowings worth Rs 125.7 crore and towards general corporate purposes, according to the DRHP.
The company has reserved 75% of the issue for qualified institutional buyers (QIB), up to 15 percent for non-institutional investors, and up to 10 percent for retail investors. Shares worth ₹200 crores are reserved for eligible employees. They have appointed JM Financial, IIFL Securities, DAM Capital Advisors, and Equirus Capital as book-running lead managers (BRLMs) for the issue. KFin Technologies is the registrar.
Industry: Technology (Online Auto Classifieds)
CarTrade is going public. An online auto classifieds company, backed by American private equity giant Warburg Pincus, Singapore’s state investor Temasek, JPMorgan and March Capital Partners, allows customers to buy and sell used as well as new cars and discover and review offerings by auto companies. They have filed draft RHP with SEBI and are all set to become India’s first auto classifieds marketplace to be listed on Indian bourses.
The company runs CarTrade.com, Carwale.com and Bikewale.com. It also offers services, such as automobile inspection, valuation, certification and other related services through Adroit, and Shriram Automall India Ltd, a platform for pre-owned commercial vehicles, passenger vehicles, construction and industrial equipment, tractors and agricultural equipment, and 2 & 3-wheelers. They picked a 51% stake in Shriram Automall in January 2018 for ₹157 crore. In 2015, it acquired rival CarWale in a move to consolidate the online auto classifieds industry.
The company plans to raise around ₹2,000 crore via the IPO. There is no fresh issue of shares and the IPO consists of a pure OFS or offer for sale of 12,354,811 equity shares.
Axis Capital, Kotak Mahindra Capital, Nomura and Citi have been appointed as the BRLM to the issue.
Clean Science and Technology Ltd
Headquartered in Pune, Clean Science and Technology Ltd is one of the largest manufacturers globally of speciality chemical products and manufactures functionally critical speciality chemicals such as performance chemicals, FMCG Chemicals, and pharmaceutical intermediates.
The company is known for its established market position and dominant presence in key speciality chemical products. Nearly 66% revenue of the company comes from exports in countries including China, Europe, the United States of America, Taiwan, Korea, and Japan.
The company has a well-diversified clientele, and the application of its products is largely in industries manufacturing essentials which limits its impact of the COVID-19 pandemic.
Speciality chemical manufacturer has already filed a red herring prospectus with market regulator SEBI to float a ₹1,400 crore -initial public offer (IPO). The IPO is entirely an offer for sale (OFS) by existing promoters and other shareholders, according to its draft RHP.
Industry:Food & Beverage
New Delhi-based Devyani International Ltd (DIL), the largest franchisee of American fast-food major Yum Brands, has filed draft RHP with SEBI to raise funds through an IPO. DIL intends to raise up to ₹1,400 crores through the offering, of which it plans to use about ₹357.83 crore to repay debt.
According to its RHP, the company plans to raise up to ₹400 crores through a fresh issue and issue another 12.53 crores shares through an Offer For Sale (OFS).
DIL owns brands such as Vaango, Food Street, Masala Twist, Ile Bar, Amreli, and Ckrussh Juice Bar, and has 692 stores across 26 states in India, with a presence in Nepal and Nigeria.DIL commenced its relationship with Yum in 1997, opening its first Pizza Hut store in Jaipur, and currently operates 297 Pizza Hut stores. The company is also a franchisee of the Costa Coffee brand, with 44 Costa Coffee stores and 264 KFC stores as of March 31, 2021.
The pandemic didn’t stop the company from its expansion plans. DIL opened 109 stores across its core brand business in the last six months. In fact, KFC and Pizza Hut were among the earliest to roll out contactless delivery in May and June 2020, respectively, it said in the DRHP.
Kotak Mahindra Capital Company Ltd, CLSA India Pvt Ltd, Edelweiss Financial Services Ltd, and Motilal Oswal Investment Advisors Ltd have been appointed as the BRLM to the issue.
Glenmark Life Sciences Limited
Industry: Pharmaceuticals & Drugs
Incorporated in the year of 2011 as ‘Zorg Laboratories Private Limited’, Glenmark Life Sciences Ltd was later acquired by Glenmark Pharmaceuticals in 2018 and is the latter’s wholly-owned subsidiary. The company is a leading developer and manufacturer of Active Pharmaceutical Ingredients (APIs). As of December 2020, the company had more than 120 APIs available in its catalogue, which they supply to more than 540 pharma companies in India and abroad including Japan, Europe, and North America.
Glenmark Life Sciences Ltd has filed a draft RHP with the SEBI to raise funds through an initial public offering. The IPO will include a fresh issue of Rs 1,160 crore and an offer for the sale of up to 7.31 million shares by parent Glenmark Pharmaceuticals Ltd.
According to its DRHP, proceeds from the fresh issue worth ₹900 crores will be used for the payment of outstanding purchase consideration to the promoter for the spin-off of the active pharmaceutical ingredients (API) business. The remaining ₹152.76 cr will be used for funding capital expenditure requirements.
Goldman Sachs, BofA Securities, Kotak Mahindra Capital, DAM Capital, BoB Caps and SBI Capital Markets have been appointed as the lead managers to the issue.
Jana Small Finance Bank Limited
Headquartered in Bengaluru, Jana Small Finance Bank, formerly known as Janalakshmi Financial Services (JFS), started its operations in the year of 2008 as an NBFC. Prior to that, it was called Sanghamitra Urban Programme (SUP) and was India’s first urban micro-finance initiative established in 1999.
JFS was awarded a non-banking finance company-microfinance institution status in 2013. In 2017, it received a small finance bank license from RBI and commenced its banking operations in 2018. The bank has now more than 500 branches across 19 states in India. JFS has served over 80 lakh customers since 2008, including approximately 30.5 lakh active customers.
Jana Small Finance Bank has filed its RHP with SEBI to float an initial share sale. The proposed IPO would comprise a fresh issue of ₹700 crore and an offer for sale of 92,53,659 shares by its promoter and existing shareholders.
It has proposed to utilize the net proceeds from the fresh issue towards augmenting its Tier–1 capital base to meet future capital requirements. Axis Capital, ICICI Securities, and SBI Capital Markets have been appointed as merchant bankers to the issue.
Shriram Properties Limited
Shriram Properties Limited commenced business in Bengaluru in the year 2000 and, today is among the five largest realty companies in Southern India. The company majorly focuses on the mid-market and affordable housing categories. It is part of the Shriram Group, which is well-recognized in the retail financial service sector.
Last month, the Company filed its draft RHP with the capital market regulator Securities & Exchange Board of India for its maiden share sale issue worth ₹800 cr. The IPO will include a fresh issue of shares worth ₹250 crore and an offer for sale of up to ₹550 crore
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