By Divyansh PokharnaThe Nifty 50 has gained over 2% in the past week, despite GDP growth hitting a seven-quarter low of 5.4% in Q2FY25. Analysts believe the weak data was already factored in after earlier corrections and subdued corporate earnings. Global market momentum and an RBI policy aligning with expectations have boosted overall sentiment. The Reserve Bank of India kept the repo rate steady at 6.5% at its meeting on December 6 but cut the CRR (cash reserve ratio) by 50 bps to 4% to boost liquidity in the banking system.
IPO activity has picked up pace as 2024 comes to a close - eight companies have debuted this month, with three more set to list next week and ten IPOs opening for subscription.
Here’s a closer look at the IPO activity scheduled for next week:
Eight new companies debuted on the bourses in the past week
The stock market witnessed the listing of eight IPOs in the past week, with seven debuting in the SME segment and one in the mainline category.
Recent IPO listings enjoy strong gains across the board
The mix of SME and mainline IPOs highlights diverse investor responses influenced by companies’ financial health, market trends, and subscription levels.
Rajesh Power & Services, an electric utilities company, surpassed FY24 revenue within the first half of FY25. Net profit increased by 6.4% during H1FY25, accompanied by a 60 bps improvement in EBITDA margins. Rajputana Biodiesel, a non-electrical utilities company, achieved record demand with retail subscription at 968.9x. Its stock trades at a 144.4% premium to its issue price. Similarly, C2C Advanced Systems, a defence company, also trades at a 142.4% premium, backed by total subscription of 116.6x.
Suraksha Diagnostic, a healthcare services company, saw overall subscription of 1.3x, with retail at just 0.9x. The company has inconsistent financials, with revenue falling 17.6% YoY in FY23, however, recovering in FY24. The IPO, being entirely an offer-for-sale, may have contributed to limited enthusiasm among investors. Abha Power & Steel, a steel products company, listed at a 9.2% premium over its IPO price of Rs 75. However, the stock quickly dropped 5% within few minutes of listing, hitting the lower circuit on the exchange.
Apex Ecotech, a non-electrical utilities firm, listed at a 90% premium but is now trading at an 71.1% premium. Ganesh Infraworld, operating in the construction and engineering industry, debuted with a 90% premium and is currently trading at a 89.5% premium. Agarwal Toughened Glass, a construction materials company, listed at a 25% premium and is now trading at a 24.9% premium.
Three SME IPOs are set for listing this week
Dalal Street will witness significant action in the SME segment this week, with the listing of three IPOs scheduled to debut.
Nisus Finance and Emerald Tyres see strong HNI demand
Nisus Finance Services: This other financial services company is set to list on the BSE SME index on Wednesday, December 11, following an impressive overall subscription of 177.6 times. The company provides financial services for corporate clients, including transaction advisory, fund and asset management, private equity, venture debt, etc., and is raising Rs 114.2 crore through its IPO.
The HNI segment recorded a notable subscription of 592 times the shares available in this category. Post-IPO, the company’s price-to-earnings* (PE) ratio is 12.9, which stands below the industry average of 50.6.
Emerald Tyre Manufacturer: The auto tyres company’s IPO concluded its bidding on December 9, with a strong subscription rate of 488.5 times on its closing day. The shares are slated to list on Thursday, December 12 on NSE SME index. The company, operating under the brand name ‘Greckster’ specializes in manufacturing, supplying, and servicing a diverse range of tyres. The IPO has raised Rs 49.3 crore.
Post-IPO, Emerald’s PE ratio is 15.1, notably lower than the industry average of 28.8, positioning it as a competitively valued player in the tyre manufacturing segment.
Dhanlaxmi Crop Science: This other agricultural products company focuses on developing, producing, processing, and selling seeds for various field crops and vegetables. The IPO, which opened on December 9, is scheduled to list on December 16, 2024.
The issue size of this SME IPO is Rs 23.8 crore. On its first day, the IPO received a total subscription of 17.2 times, with retail subscriptions accounting for 40.6 times. Post-IPO, the company's price-to-earnings (PE) ratio stands at 5.5, significantly lower than the industry average of 26.8.
*Note: The post-issue P/E ratio is calculated using the issue price divided by the post-issue EPS, based on annualized FY earnings as of March 31, 2024, from the RHP.
Action-packed week ahead with ten new offerings
Ten IPOs are scheduled to open in the second week of December, including five in the SME segment and five in the mainline category.
Most companies witness revenue growth during FY24
Vishal Mega Mart: This department store company offers a wide variety of products including apparel, groceries, electronics, and home essentials. As of September 30, 2024, it operates 645 stores across 414 cities in 28 states and two union territories.
Vishal Mega Mart’s IPO opens for subscription on December 11 till December 13. The three-day offer includes a one-day bidding window for anchor investors on December 10. The company has shown significant financial growth, with revenue rising by 17.4% and net profit increasing by 43.8% between FY24 and FY23.
This mainline IPO will be an offer-for-sale (OFS) of shares by the promoter, Samayat Services LLP, with no fresh equity issuance. The company aims to raise ~Rs 8,000 crore through this offer. The price band for the IPO is set at Rs 74–78 per share, with a minimum lot size of 190 shares. Retail investors must invest at least Rs 14,280, while HNIs are required to invest Rs 207,480 for 14 lots (2,660 shares).
Sai Life Sciences: This pharmaceutical company focuses on researching, developing, and manufacturing small-molecule new chemical entities, offering customized services to biotech firms and global pharma companies.
The company plans to raise Rs 3,042.6 crore through its mainline IPO, with a price band of Rs 522–549 per share and a minimum lot size of 27 shares. The issue will open for bidding on December 11 and close on December 13. The shares are set to debut on the stock exchanges on December 18.
The proceeds from the IPO will be used for repayment or prepayment of certain borrowings and general corporate purposes. The company reported a remarkable 729% YoY growth in net profit to Rs 83 crore in FY24 and a 20% YoY increase in revenue.
One Mobikwik Systems: This internet software & services company specializes in fintech solutions, offering prepaid digital wallets and online payment services. The company aims to raise Rs 572 crore to fund growth in its financial and payment services businesses, enhance investments in data, machine learning (ML), and artificial intelligence (AI), as well as allocate capital expenditure for its payment devices segment.
The mainline IPO will open for subscription on December 11 and close on December 13, with shares expected to list on December 18. The IPO is priced at Rs 265–279 per share, with a lot size of 53 shares.
The company has demonstrated revenue growth over the years, recording a profit of Rs 14.1 crore in FY24. However, it reported losses in Q1FY25, FY23, and FY22.
Toss The Coin:This is a marketing consulting firm specializing in Go-To-Market (GTM) strategies for B2B tech companies, offers services like branding, content creation, website design, social media campaigns, and customer success management.
The company plans to raise Rs 9.2 crore through an SME IPO to fund capital expenditure for developing a Microservices Application, opening new offices, and addressing working capital needs. Its net profit declined by 38.4% YoY during FY24, driven by higher employee benefit expenses, despite a 2.5% increase in revenue.
The IPO opens on December 10 and closes on December 12, with shares listing on the BSE SME index on December 17.
Purple United Sales:This apparel and accessories company’s flagship brand, Purple United Kids, offers clothing and footwear for children aged 0 to 14. The company aims to raise Rs 32.8 crore through its IPO to fund new store openings and working capital requirements.
The company has shown strong growth, with revenue increasing by 67% YoY and net profit surging by 223% in FY24. The IPO will be open for subscription from December 11 to December 13, with shares set to list on the NSE SME index on December 18.
Jungle Camps India:This hotels company operates wildlife camps, hotels, motels, inns, guest houses, holiday homes, health clubs, catering houses, and restaurants across India. The Jungle Camps India IPO, a book-built issue worth Rs 29.4 crore, will open for public subscription on Monday, December 10, and close on Thursday, December 12. The shares are set to list on the BSE SME index on Tuesday, December 17.
The company aims to use the funds raised through its IPO for project development at Sanjay Dubri National Park, renovations at Pench Jungle Camp, investment in Madhuvan Hospitality’s Mathura Hotel Project, and general corporate purposes.
The company reported a 38% YoY revenue decline in FY23 due to increased employee benefits and other expenses, despite achieving a 44% growth in revenue during the same period. In FY24, net profit surged by 700%, showing substantial improvement.
Supreme Facility Management: This misc. commercial services company provides integrated facility management solutions, including housekeeping, cleaning, disinfecting, staffing, and corporate food services for businesses.
The company aims to raise Rs 50 crore through its SME IPO, which opens for subscription on December 11 and closes on December 13. The shares are scheduled for listing on the stock exchanges on December 18.
The funds raised will be used for working capital requirements, pursuing inorganic initiatives, and general corporate purposes. During FY24, the company saw a 7.9% YoY increase in revenue and a 33.8% YoY rise in net profit.
Yash High Voltage: This heavy electrical equipment company specializes in manufacturing and distributing transformer bushings. The company’s production unit is in Vadodara, Gujarat and has an annual capacity of 7,000 bushings. Yash Highvoltage will open the issue on December 12 and closing on December 16. The shares are set to list on December 19 on the BSE SME index.
The funds raised will be utilized for setting up a new factory to produce Resin Impregnated Paper (RIP) and Resin Impregnated Synthetic (RIS) transformer condenser graded bushings. In FY24, the company reported a 20.4% YoY growth in revenue and a 5.6% rise in net profit.
Inventurus Knowledge Solutions: This healthcare services firm provides administrative support to healthcare enterprises, including clinical support, medical documentation management, virtual medical scribing, and more. The company helps doctors and healthcare providers by handling their paperwork and administrative tasks.
The upcoming IPO, with an issue size of Rs 2,497.9 crore, will open on December 12 and close on December 16, with shares listed on December 19. This mainline IPO will be an offer-for-sale (OFS) of shares by the promoter, with no fresh equity issuance.
In FY24, IKS Health achieved a 75.3% YoY revenue growth and a 21.4% increase in net profit.
International Gemmological Institute: This misc. commercial services company is a globally recognized organization specializing in certifying and grading diamonds, gemstones, and jewelry. IGI provides independent grading reports that assess the characteristics of stones using internationally recognized standards, covering attributes like color, cut, clarity, and carat weight.
The company plans to use the funds raised from its IPO to pay the purchase consideration for acquiring IGI Belgium Group and IGI Netherlands Group from the promoter, along with general corporate purposes. The offer size is Rs 4,225 crore.
For the nine months ending in CY24, the company reported a revenue of Rs 619.5 crore, compared to Rs 648.7 crore in CY23.
