NEW DELHI: After a blockbuster November for the equity as well as the IPO market, three more firms will be conducting their initial share sale this week to become a publicly listed company. Wine producer Sula Vineyards, automobile dealership chain Landmark Cars and Abans Holdings, the financial services arm of Abans Group, will be launching their initial public offerings (IPOs) this week to collectively raise about R1,858 crore.
While Sula and Abans will open for public subscription on December 12, Landmark’s initial sale of shares for the public will begin on December 13. These IPOs come at a time when the equity market is trading at a high with the bulls not willing to lose their grip. However, it also comes at a time when the RBI has increased repo rates, making borrowings more expensive than before.
Ankit Yadav, Founder and Director of Market Maestroo, said all three IPOs are coming at a time of interest rate hikes. Generally, there is an opportunity for making wealth from IPOs in low-rate scenarios where borrowing is easy. “Today at high rates, the businesses that are bringing IPOs need to be top-notch in fundamental terms,” he added.
In 2022 so far, about 33 companies have come out with their IPOs to mop up over R55,000 crore. In 2021, the numbers were much higher as 63 IPOs had raised more than R1.19 lakh crore.
How much are they raising?
Sula Vineyards Limited, the country’s largest wine producer, has fixed the price band at Rs 340 to Rs 357 per Equity Share for its maiden public offer. At the upper end of the price band, the public issue is expected to fetch R960.35 crore. Sula on Friday informed that it has garnered R288.10 crore from anchor investors, ahead of the IPO, which will open on Monday, December 12, 2022, for subscription and close on Wednesday, December 14, 2022.
In Sula, investors can bid for a minimum of 42 Equity Shares and in multiples of 42 Equity Shares thereafter. The public issue with a face value of R2 per equity share is a complete offer for sale (OFS) aggregating to 26,900,530 equity shares by existing shareholders.
The IPO of Landmark Cars, which had dealerships for brands such as Mercedes-Benz, Honda, Jeep, Volkswagen and Renault, is going to open on 13 December 2022, and it will remain open for bidders till 15 December 2022.
Landmark has fixed the price band of its public offer at Rs 481 to Rs 506 apiece as it aims to mop up Rs 552 crore from this exercise. Proceeds from fresh issuance will be utilised for payment of debt and general corporate purposes, the company said in its draft paper.
The IPO of Abans Holdings comprises fresh issuance of equity shares of up to 38 lakh and an offer-for-sale of up to 90 lakh equity shares by promoter Abhishek Bansal. The company has set a price band of Rs 256 to Rs 270 a share for its IPO and is expecting to raise R345.6 crore at the higher end of the price band. Abans Holding operates as a diversified global financial services business, providing Non-Banking Financial Company (NBFC) services, global institutional trading in equities, commodities and foreign exchange, private client stockbroking, depository services and asset management services, among others, to corporates, institutional and high net worth individual clients. It currently has active businesses across six countries --the UK, Singapore, UAE, China, Mauritius and India.
What is the GMP Signalling?
All three IPOs were commanding a premium in the grey market till Sunday, indicating a positive listing on the bourses. However, the premiums were not as high as they would have liked. Shares of Landmark Cars were available at a premium of Rs 50 (10% over the IPO price) in the grey market while that of Sula were commanding a premium of Rs 40 or 11% over the IPO price. GMP (Grey Market Premium) of Aban holding at Rs 15 was just 6% above its IPO price. If India’s equity market sees heavy selling in the coming sessions, it won’t be a surprise to see the premiums turning into discounts.
All three firms reported a profit in FY2022
Abans recorded a 35% growth in profit at R61.97 crore for FY22 but its revenue fell by 52% to R 638.63 crore in the same period. Landmark reported a profit of R66.18 crore with a total revenue of R2,989.12 crore in FY22 while Sula’s profit jumped to Rs 52.1 crore in FY22 compared to Rs 3 crore in FY21.
