NEW DELHI: Two companies—Indian Railway Finance Corporation (IRFC) and Sequoia Capital-backed Indigo Paints—are all set to hit India’s initial public offering (PO) market this week. While IRFC’s IPO is expected to raise up to Rs 4,633.4 crore at the upper end of the price band, Indigo Paints’ public issue is slated to fetch up to Rs 1,170.16 crore. The two IPOs come at a time when the Indian stock markets have hit a peak.
According to documents shared by the companies, the three-day initial share-sale of IRFC would be open for public subscription between January 18-20, while Indigo Paints’ IPO will open on January 20 and end on January 22. IRFC’s IPO comprises up to 178.20 crore shares—this includes a fresh issue of up to 118.80 crore shares and an offer-for-sale of up to 59.40 crore shares by the government. The price band has been fixed in the range of Rs 25-26 per equity share and bids can be made for a minimum of 575 equity shares and in multiples of 575 thereafter.
IRFC, the dedicated market borrowing arm of the Indian Railways, has also said that it has raised Rs 1,398.63 crore from 31 anchor investors ahead of its public issue. These investors have been allocated 534,563,007 equity shares at an upper price band of Rs 26 per shares (which includes a premium of Rs 16 per equity share). On the other hand, the IPO of Indigo Paints comprises a fresh issuance of stocks aggregating to Rs 300 crore and an offer-for-sale of up to 58,40,000 equity shares by Sequoia Capital, through its two funds—SCI Investments IV and SCI Investments V—and promoter Hemant Jalan.
The price band has been set at Rs 1,488-1,490 a share for its initial share-sale. Half of this issue is reserved for qualified institutional buyers, 35 per cent for retail investors, 15 per /cent for non-institutional bidders, and there is a reservation of up to 70,000 equity shares for employees who may wish to subscribe, these will get a discount of Rs 148 per equity share to the offer price.
Proceeds from the fresh issuance of shares will be used for the expansion of the company’s existing manufacturing facility at Pudukkottai in Tamil Nadu, for the purchasing of tinting machines and gyro shakers, and servicing borrowings, the company said. India’s IPO market performed exceptionally well last year even as the Covid-19 pandemic wrecked the economy.
A total of 16 companies raised over Rs 30,000 crore from investors in the calendar year 2020 as against Rs 17,433 crore raised by 17 companies in 2019. In the new year 2021, nearly two dozen more companies are lined up to hit the capital markets with initial public offerings.