To raise around Rs 3,740 crore this week, Kalyan Jewellers India and ace investor Rakesh Jhunjhunwala-backed mobile game company Nazara Technologies and including 3 other companies will launch their initial public offerings, one of the busiest for IPOs in a long time.
Experts also give credit to the IPO rush, to ample liquidity that has been fuelling a bull run in the market. More than Rs 2.6 lakh crore of FII money has been received by equity markets since April 2020.
Chemical manufacturer Laxmi Organic Industries and automobile components manufacturer Craftsman Automation both top of their field will be the first off the block. Their issues will open from March 15 to March 17, 2021.
Laxmi Organic Industries has been promoted by Ravi Goenka and Yellow Stone Trust. Laxmi Organic Industries is planning to raise Rs 600 crore through the IPO, which comprises a fresh issue of Rs 300 crore and an offer for sale of Rs 300 crore by the promoter.
Craftsman Automation is looking to mop up Rs 823.70 crore through the issues that comprises a fresh issue of Rs 150 crore and the rest is an offer for sale by promoters and investors.
Rs 180 crore and Rs 247 crore both companies have already raised respectively from the anchor investors on March 12, the last working day ahead of the opening of the issues.
Kalyan Jewellers India’s Rs 1,175-crore issue opens on March 16 and will close on March 18. The offer comprises a fresh issue of Rs 800 crore and an offer for sale of Rs 375 crore by promoter and investors. Its anchor book, if any, will open for a day for bidding on March 15.
Jhunjhunwala-backed Nazara Technologies and Suryoday Small Finance Bank’s IPOs will open for bidding, the next day. Raising Rs 582.91 crore is the set target by Nazara Technologies, while Suryoday Small Finance Bank is in the market for Rs 582.34 crore. The issues close on March 19. Their anchor book, if any, will open for subscription for a single day on March 16.
Anupam Rasayan a chemical company whose Rs 760-crore IPO opened for bidding on March 12, will be available for subscription till March 16.
10 companies have raised more than Rs 13,850 crore through IPOs in 2021, so far and another Rs 4,500 crore is expected to be mopped up by six more firms during this week. So the year 2021, like the previous year, has been a busy one for IPOs.
Availability of low-cost money could be a big reason for the IPO rush, which has been boosting equity markets in the last year, experts feel.
More than Rs 2.6 lakh crore of FII money has been received by equity markets since April 2020, which has resulted in a 75 per cent return on the Nifty and more than doubled returns for midcap and smallcap indices.
“It isn’t the first time that a low-cost source of money is leading to expensive equity valuations. In the past bull markets too, liquidity tailwinds have always been a big catalyst to boost equity returns. All this liquidity is visible in the primary markets too,” Nirali Shah, Head of Equity Research at Samco Securities said.
The ongoing enthusiasm in primary markets through IPOs, follow on public offers and offers for sale was in harmony with the current bull market rally, she said.
“Retail investors are the most excited lot subscribing to these IPOs for listing gains and nearly 78 per cent of total stock listings in FY21 have witnessed first-day gains, the highest in at least three years,” she added.
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