After a downtrend following the US Federal Reserve’s careful remarks on future rate cuts, the Nifty 50 picked up slightly, with a rise of 0.5% over the past week. 

Analysts believe persistent FII (foreign institutional investors) selling has weighed on Indian markets. FIIs sold equities worth over Rs 6,322.9 crore during the week, while DIIs invested Rs 10,927.7 crore.

Meanwhile, IPO activity remains steady as we head into the new year - eleven companies debuted last week, three are set to list this week, and another three IPOs are opening for subscription.

Here’s a look at the IPO activity scheduled for this week:

Eleven new companies made their stock market debut last week

The stock market saw eleven IPOs debut last week, with eight from the mainline segment and three in the SME category.

All companies except Carraro India list at a premium

Mamata Machinery, an industrial machinery manufacturer, listed on December 27 with a 146.9% gain. Its Rs 179.4 crore IPO was subscribed 195X. In FY24, the company reported a 15% YoY increase in revenue and a 61% rise in net profit.

Senores Pharmaceuticals, a pharma company listed with a 53.5% premium. Its Rs 582.1 crore IPO, subscribed 93.4X, included a Rs 500 crore fresh issue. The funds are allocated for investments in subsidiaries, capital expenditure for sterile injection manufacturing, repayment of borrowings, working capital requirements, and strategic acquisitions.

Carraro India, a commercial vehicle company, saw its Rs 1,250 crore offer for sale subscribed 1.1X overall, though the HNI and retail categories remained undersubscribed at 0.6X and 0.7X, respectively. It listed at a 7.5% discount.

Other mainline IPOs: DAM Capital Advisors, Transrail Lighting, Sanathan Textiles, Concord Enviro Systems, and Ventive Hospitality listed with moderate gains of 38.9%, 36.6%, 31.6%, 17.8%, and 11.4%, respectively.

Three SME IPOs debuted last week, only one company was listed at its issue price.

NACDAC and Identical Brains surge post strong debut

NACDAC Infrastructure, a construction and engineering company listed at a 90% premium on December 24 and has been hitting the upper circuit daily since. Its IPO, a fresh issue with no offer for sale, was subscribed 3232.8X overall, with the HNI category achieving a record oversubscription of 5237.1X. In FY24, the company’s revenue rose by 209.5% YoY, while net profit increased by 464.38%.

Identical Brains Studio, an entertainment company, saw its Rs 20 crore IPO subscribed by 506.1X. It listed on the bourses with a 75.9% premium and is currently trading with a 75.6% gain.

Newmalayalam Steel, a steel products manufacturer, listed at its issue price on December 27 but hit its 5% lower circuit thereafter. The IPO was subscribed 48.2X overall, with the QIB category at just 1.2X. The company reported a 15.8% YoY decline in revenue and a 28.9% drop in net profit for FY24.

Three new IPOs are set for listing this week 

Investors can look forward to three IPOs listing this week – two in the SME category and one in the mainline segment.

Unimech witnesses strong QIB and HNI demand

Unimech Aerospace and Manufacturing, an industrial machinery company, received bids for 175.3X the total shares on offer, with the QIB category subscribing 317.6X. The Rs 500 crore issue is set to list on December 31. The company manufactures complex tools, mechanical assemblies, electro-mechanical systems, and components for aeroengine and airframe production. Its post-IPO price-to-earnings (PE) ratio is 51.6, which is lower than the industry average of 53.

Anya Polytech & Fertilizers, a packaging company focused on bag manufacturing, fertilizers, and environmental solutions, has launched a Rs 44.8 crore IPO. The issue has been subscribed 16.7X overall, with the retail category subscribed 41.3X. The IPO will be listed on the NSE SME platform on January 2, 2025. Post-IPO, the company’s PE ratio stands at 9.3, significantly lower than the industry average of 32.8.

Citichem India, a commodity trading firm, is closing its Rs 12.6 crore IPO on December 31, with shares listing on the BSE SME platform on January 3. The IPO received bids of 8.6X, with the retail category subscribing 14.8X. The company is involved in supplying organic and inorganic chemicals, bulk drugs, and food chemicals to the pharmaceutical industry.

*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.

Upcoming subscriptions: Three new offerings to launch this week

Three IPOs are scheduled to open for subscription this week, including one in the mainline segment and two in the SME category.

Technichem and Leo Dry Fruits see strong profit growth YoY in FY24

Indo Farm Equipment: This commercial vehicle manufacturer, operating under the brands Indo Farm and Indo Power, specializes in tractors, pick-and-carry cranes, and other harvesting equipment. The IPO, valued at Rs 260.2 crore, opens on December 31 and closes on January 2. The shares are scheduled to list on January 7.  

The IPO proceeds will be used to set up a new unit to expand pick-and-carry crane manufacturing, repay borrowings, and invest in its NBFC subsidiary, Barota Finance. In FY24, the company’s revenue increased only marginally, by 1% YoY and net profit rose by 1.5%.

Technichem Organics: This specialty chemicals company is engaged in manufacturing a range of chemicals including specialty chemicals, pigment and dye intermediates, and air oxidation chemistry. Its IPO is launching with an issue size of Rs 25.5 crore, a complete fresh issue. The IPO opens on December 31, closes on January 2, and will be listed on the BSE SME platform on January 7.

The IPO proceeds will be directed towards capital expenditure for setting up a new plant, “Plant 4,” repaying borrowings from banks and financial institutions, and for general corporate purposes.

In FY24, the company’s revenue decreased by 8% YoY due to a decline in its pigment, specialty dyes, and chemicals segments. However, net profit rose by 173% due to lower cost of goods sold.

Leo Dry Fruits and Spices Trading: This food products company is launching an IPO with an issue size of Rs 25.1 crore, a fresh issue. The IPO will open on January 1, close on January 3, and list on January 8 on the BSE SME platform.  

This company specializes in manufacturing and trading a variety of spices and dry fruits under the brand VANDU, as well as frozen and semi-fried products under the brand FRYD. In FY24, the company’s revenue increased by 71% YoY, while net profit rose by 83%.  

The IPO proceeds will be utilized towards working capital requirements, support branding, advertisement, and marketing activities, and for general corporate purposes.