The Indian stock market ended last week with a 0.5% decline in the Nifty 50, driven by persistent FII selling and concerns over Trump’s economic policies. The market sentiment has remained cautious ahead of major events, including the Union Budget 2025, the FOMC meeting, and US GDP data for the December quarter.

Finance Minister Nirmala Sitharaman is expected to focus on increasing spending and growing the economy while keeping government finances under control. Experts predict the fiscal deficit for FY25 will be between 4.7% and 4.8% of GDP, lower than the budget estimate of 4.9%. A Barclays analyst says, “We expect some tweaks in tax slabs to support consumption. Customs duty announcements will be pivotal to understand the government’s response to tariffs under Trump 2.0.”

The IPO activity remains steady, with five companies set to list this week, two opening for subscription, and six that debuted last week.

220 times oversubscribed, Denta Water IPO to list this week

Denta Water and Infra Solutions, a non-electric utilities company, specializes in designing, installing, and commissioning water management infrastructure projects, with a focus on groundwater recharge solutions.

The company opened its Rs 220.5 crore IPO for subscription on January 22, with a listing scheduled for January 29. This fully fresh issue IPO saw strong demand, with overall bids of 221.7X and HNI subscriptions at 507.3X. It plans to use its proceeds to meet working capital requirements and for general corporate purposes.

As of November 30, 2024, it has completed 32 water management projects—11 as the main contractor, one in a joint venture, and 20 as a sub-contractor. The company's order book stands at Rs 752 crore, with more than 95% of revenue derived from groundwater-related contracts. In FY24, Denta Water reported revenue growth of 37.6% YoY to Rs 241.8 crore, while net profit increased by 19.2% to Rs 59.7 crore. 

Denta Water, in its RHP, lists VA Tech Wabag and EMS as peers, having a price-to-earnings (PE) ratio of 36.9 and 27.3, respectively. Denta Water's PE ratio of 16.2 is significantly lower, indicating a relatively attractive valuation. The issue’s sole book-running lead manager is SMC Capitals, with Integrated Registry Management Services as the registrar.

Additionally, four SME IPOs are set to list this week.

Denta Water & Infra Solutions witnesses strong HNI demand

Rexpro Enterprises, a furniture manufacturer, is set to list on January 29 on the NSE SME platform. The Rs 53.7 crore IPO, which caters to offices, hospitals, government facilities, and the home segment, was subscribed 16.9X. CLN Energy, an electrical equipment company, will close its Rs 72.3 crore IPO on January 27, with listing scheduled for January 30 on the BSE SME platform. The IPO received a subscription of 2.7X, though the QIB category saw limited interest, with only 0.6X subscription.

Two additional IPOs are set to debut on January 31. H.M. Electro Mech, a construction firm, and GB Logistics Commerce, a logistics provider, both closed their IPOs on January 28. As of Day 1, the companies recorded subscriptions of 7.3X and 5.4X, respectively.

Dr. Agarwal's Rs 3,027 crore IPO to open this week

Dr. Agarwal's Health Care is here with its Rs 3,027.3 crore IPO, featuring a Rs 300 crore fresh issue and the rest as an offer for sale. 

Dr. Agarwal's Health Care sees a net profit decline in FY24

This eye-care specialist’s IPO will open for subscription on January 29 and close on January 31, with a listing scheduled for February 5. The price band is set at Rs 382-402, with a lot size of 35 shares.

The company offers a wide range of eye care services, including cataract and refractive surgeries, consultations, diagnostics, and the sale of optical products, contact lenses, accessories, and pharmaceutical items. As of September 30, 2024, it operates 28 hubs and 165 spokes across 117 metro and non-metro cities in 14 states and four union territories.

The company has allocated not more than 50% for qualified institutional buyers (QIBs), not less than 15% for high net-worth individuals (HNIs), and not less than 35% for retail investors. It reportedly held a market share of approximately 25% of the total eye care service chain market in India during FY24 and issued bonus shares in the ratio of 2:1 in September 2024.

In FY24, the company’s revenue increased by 33.4% YoY to Rs 1,376.5 crore. However, net profit declined by 7.9% to Rs 95.1 crore, primarily due to higher tax expenses compared to a deferred tax credit of Rs 40 crore in FY23. The IPO proceeds will be used for repayment/prepayment of borrowings, general corporate purposes, and potential inorganic acquisitions.

SME IPO, Malpani Pipes & Fittings, to open for subscription this week.

Malpani Pipes and Fittings: This plastic pipes manufacturer is set to open its Rs 25.9 crore IPO for subscription on January 29, closing on January 31, with a listing scheduled for February 5. The company specializes in producing high-grade plastic pipes used in irrigation, water supply, sewerage, drainage, boreholes, tube wells, and infrastructure projects such as electrical cable and optical fiber installations. 

The IPO proceeds will be utilized for capital expenditure to purchase machinery, repayment of debt, and general corporate purposes. The company aims to strengthen its operations and enhance its capacity to meet growing demand across diverse sectors.

Six new firms debuted on the bourses last week

The stock market saw six IPOs debut last week, with five from the SME segment and one in the mainline category.

Recent IPO listings enjoy strong gains across the board

Two IPOs listed on January 22 at a 90% premium to their issue prices. Kabra Jewels, a gems & jewellery firm with a Rs 40 crore IPO, subscribed 310.8X, and Rikhav Securities, a capital markets company with a Rs 1.9 crore IPO subscribed 285.3X.

Stallion India Fluorochemicals, the only mainline IPO last week, debuted on January 23 with a 33.3% gain and hit its 5% upper circuit the same day. This specialty chemicals company later declined to a 5% lower circuit on January 24 and currently holds a 33% gain from its issue price. The Rs 188.4X subscribed IPO involves selling refrigerant and industrial gases, debulking, blending, and processing related products.

EMA Partners India, a misc. commercial services firm, debuted with a 26.2% gain on its listing day but later declined to a 19.9% gain as of January 24. Two other SME companies, Landmark Immigration Consultants and CapitalNumbers Infotech, both opened at a 4.2% premium but subsequently slipped to a ~1% loss.