KOCHI: Riding on the boom in stock markets, at least six Kerala-based companies including Popular Vehicles, ESAF Small Finance Bank, Manappuram Finance’s microfinance arm Asirwad Microfinance, Muthoot Pappachan group’s Muthoot Microfin are launching their initial public offers (IPOs) in the next 12-18 months to mobilise nearly Rs 7,700 crore.
Other companies preparing for the IPO include jewellers Joyalukkas and Malabar Gold. The first to hit the market is Thrissur-based ESAF, which is expected to raise nearly Rs 1,000 crore through its share sales in the next few weeks, while Popular Vehicles and Services, which has filed its draft IPO documents, is scheduled to hit the market next. Popular, a leading vehicle dealer, is aiming to raise Rs700 crore through the IPO, investment banking sources said.
The microfinance firms Asirwad Microfinance and Muthoot Microfin are also planning to collect Rs1,000 crore. The stock markets have been on a bull run in the last 12 months or so. The bellwether stock indices Sensex of BSE and Nifty of NSE have risen by 51.70% and 52.90%, respectively, during the period. The BSE IPO index gave even better returns, rising by nearly 95%.
Popular share's sale most awaited in ESAF
According to investment bankers, Joyalukkas is expected to raise Rs 1,500 crore while Malabar Gold is planning a Rs 2,000-crore initial share sale.
But, it needs to be seen how the investors would respond to the ipOs by Joyalukkas and Malabar Gold, considering the tepid performance by Kalyan Jewellers on the stock market, after its listing in March. Kalyan Jewellers is trading at Rs 67.30 a piece on Tuesday, as against the IPO price of Rs 87 aa piece, a decline of 22.64%.
Joyalukkas is planning an IPO in the last quarter of FY22. the company is expected to file the DRHP (draft red herring prospectus) with Sebi in the last week of November or early December.
Joyalukkas has apparently sounded out a slew of top investment bankers to handle the mandate for the issue, sources said. incidentally, this is the second time Joyalukkas will be attempting an IPO.
It had finalised plans for one in 2018 but shelved it after the Nirav Modi scam hit PNB.
Most jewellery companies had come under the scanner and even credit to jewellers got tightened. “the current calendar year has been one of the best for IPOs in India and this has become an important fundraising and liquidity source for companies. Companies across the country including Kerala are looking to tap the market. Given the quality of companies, post-listing performance, and general outlook for secondary markets, we expect a strong IPO market going forward,” said Pranjal Srivastava, partner, Centrum Capital Ltd, a leading financial services firm.
The most awaited IPO after ESAF is popular’s share sale. the Kochi-based firm is a leading diversified automotive dealership in India in terms of revenue, with a presence across the automotive retail value chain.
For the fiscal year 2021, popular reported revenue from operations of Rs 2,893.53 crore against Rs 3,171.62 crore a year ago. net profit for the period stood at Rs 32.45 crore versus Rs 12.49 crore last year.
“Retail investors are participating in the IPO. the performance of each IPO depends on company-specific factors and the overall markets. investors have to evaluate each IPO on its merits before investing in the IPO,” said Srivastava.