The primary market seems to have taken a breather from its recent euphoria. The new financial year 2022-2023 began with few initial public offerings (IPO) in April and May. However, the IPO fever seen in late 2021 and early 2022 completely dried up in June.
The sentiment on Dalal Street have soured amid a combination of global geopolitical and economic factors. Heavy selloff and prevailing uncertainty in secondary markets have played spoil sport for the primary market as well. This was evident by the fact that only 16 companies launched their initial share sale this year, raising more than Rs 40,000 crore.
The benchmark Nifty50 index is down around 9% YTD. The market correction has been led by the sustained selling of Indian shares by foreign institutional investors (FII) as global central banks are raising interest rate aggressively to tame the inflation.
Worries and uncertainty over the Russia-Ukraine war and its fallout on the global economy have kept investors on the edge. Rising commodity and energy prices have also impacted the margins of India Inc, ultimately prompting investors to remain cautious.
All these factors seem to have hurt the fundraising capacity in the primary markets. After a few IPOs in May, there was no new IPOs in the month of June. However, two companies – eMudhra Ltd and Aether Industries Ltd got listed. The IPOs of both these companies were launched for public subscription in May.
Listings in June 2022
The Rs 412.79-crore eMudhra IPO, the digital signature certificate provider, was launched from May 20 to May 24 at a price band of Rs 243 to Rs 256 per share. The stock got listed on June 1 at Rs 271.00 apiece on the BSE, a premium of 5.86% to its issue price of Rs 256.00. The stock started trading at a premium of 5.47% at Rs 270.00 on the National Stock Exchange (NSE).
Shares of eMudhra have fallen during the month and are now trading near Rs 240 apiece, below its IPO price.
Aether Industries IPO
The Rs 808.04-crore Aether Industries IPO was opened from May 24 to May 26 and priced at Rs 610 to Rs 642 per share. On June 3, the speciality chemicals company Aether Industries got listed at Rs 706.15, a 10% premium over its issue price of Rs 642 on BSE. The scrip was listed at Rs 704 on the NSE. The shares of Aether Industries are trading near Rs 760 apiece on the exchanges.
Let’s take a look at the tentative upcoming IPOs in July:
|Name Of The Company
|IPO Size (Approximate Value)
|Rs 3,000 crore
|Rs 4,000-5,000 crore
|TVS Supply Chain Solutions
|Rs 5,000 crore
|Rs 6,250 crore
|Bikaji Foods International
|Rs 1,000 crore
Droom Technologies IPO
Droom Technologies is an e-commerce platform that facilitates buying and selling of second-hand vehicles. The company is expected to come up with its IPO soon after the receipt of market regulator Securities & Exchange Board of India’s (SEBI) approval earlier this year.
Droom Technologies IPO will be worth Rs 3,000 crore and comprise of a fresh issue of shares worth Rs 2,000 crore and an offer for sale (OFS) of shares worth Rs 1,000 crore, as per the Draft Red Herring Prospectus (DRHP) of the company.
The company proposes to utilize the net proceeds from the fresh issue to fund organic and inorganic growth initiatives and for general corporate purposes. The lead book running managers are ICICI Securities, Axis Capital, Edelweiss, Nomura and HSBC.
Emcure Pharmaceuticals IPO
The IPO of Emcure Pharmaceuticals is expected to be around Rs 4,000-5,000 crore, which will comprise of fresh issuance of equity shares worth Rs 1,100 crore and an OFS of 18,168,356 equity shares by promoters and existing shareholders.
The Bain Capital-backed Emcure Pharmaceuticals is a major pharma company based in Pune, Maharashtra. The company had received regulatory approval for an initial share-sale in December 2021. The company proposes to utilize the proceeds from the fresh issue to pay its loans, as per the DRHP.
TVS Supply Chain Solutions IPO
TVS Supply Chain Solutions, a part of TVS Mobility Group, is a global supply chain solutions company. The company received SEBI’s nod for an IPO in May. TVS Supply Chain Solutions IPO will comprise of a fresh issue of equity shares of up to Rs 2,000 crore and an OFS of up to 5.95 crore equity shares by promoter and existing investors. As per media reports, the total issue size is expected to be around Rs 5,000 crore. The company may float the IPO next month.
The company is likely to use the proceeds from the fresh issue to repay debt, capitalisation of its overseas subsidiaries, inorganic growth and general corporate purposes.
API Holdings Ltd, the parent company of PharmEasy brand, received SEBI’s approval to float an IPO in February this year. PharmEasy is an online pharmacy or a digital healthcare platform that provides health services from teleconsultation to home delivery of medical products and devices.
The company had filed its draft IPO papers with the regulator in November 2021 to raise Rs 6,250 crore through the fresh issue of shares. The IPO will not consist of any OFS component. It plans to use the net IPO proceedings for prepayment or repayment of all or portion of its certain outstanding borrowings.
Bikaji Foods International
Bikaji Foods International, the manufacturer of ethnic savouries and sweets, is expected to launch its IPO soon going ahead. Bikaji Foods International IPO will be a pure OFS of upto 29,373,984 equity shares by its existing shareholders and promoters. The company is likely to raise around Rs 1,000 crore from the IPO, according to media reports. The company will not receive any proceeds from the issue.
Please note that the above list of upcoming IPOs in July is indicative, and it may change.