NEW DELHI: There is no dearth of investors when it comes to investing in IPOs (initial public offerings). After the stupendous success of Zomato IPO and huge demand for initial shares of Glenmark Life Sciences (subscribed 44.17 times), four IPOs — Windlas biotech, Devyani international, Krsnaa diagnostics, and Exxaro Tiles — that opened for subscription on Wednesday got fully subscribed within hours.
These IPOs are hitting the market when benchmark indices — the Sensex and the Nifty50 — are at record level and overall sentiment is bullish. After growing by 1.6% on Tuesday, BSE Sensex on Monday added another 546 points to close at 54,369. Nifty50 surged 128 points during Wednesday’s session to close at 16,258.
The Rs 1,838-crore IPO by Devyani International was subscribed 2.69 times on the first day of the bidding process. The IPO is being sold in the Rs 86-90 price band.Since Devyani, which is India’s largest franchisee of international food giants such as KFC, Pizza Hut, and Costa Coffee, is a loss-making firm, analysts are valuing it on metrics such as EV/Ebitda and EV/sales, and most of them have given a subscribe rating on the issue.
“We believe Devyani International would be able to capture the growth owing to metro lifestyle and outside food habits. This, coupled with the company’s cost rationalisation initiatives will help drive profitability in future,” said ICICI Direct which recommended subscribe to the issue.Windlas Biotech’s Rs 401-crore IPO was subscribed 3.15 times on the first day. The three-day offer is in a price range of Rs 448-460. But in the grey market, its shares were trading at Rs 590 apiece.
“We believe the company is well placed to grab the opportunity arising from the industry given its strong product portfolio, relationship with its customers, R&D capabilities and efficient & quality compliant manufacturing facilities. We have a positive view on the company from the long term perspective,’” Religare Broking said.
The Rs 1,213-crore Krsnaa Diagnostics IPO got fully subscribed nearly 2 times on debut. The IPO is being sold in the price band of Rs 933-954, with asking valuations at 77 times FY21 earnings per share.
Meanwhile, Exxaro Tiles’ Rs 162-crore IPO got subscribed by 4.6 times. The price range for the IPO is at Rs 118-120. Analysts are divided on this IPO as they feel that India’s tiles industy is fragmented with organised section controlled by a few big names. In the grey market it was commanding a premium of Rs 20, indicating a healthy listing gain.