The market delivered a strong performance last week, with the Nifty 50 rising 4.2%. The gains were driven by easing geopolitical tensions, including a ceasefire between India and Pakistan.  Market sentiment was further boosted by US President Trump’s claim that India had proposed zero tariffs on US goods.

A further drop in inflation has raised expectations of an interest rate cut in the RBI’s June policy meeting. Retail inflation eased to a six-year low of 3.16% in April from 3.34% in March, led by a decline in food prices. The market also gained support from steady buying by FIIs and DIIs and lower oil prices. 

Saumya Kanti Ghosh, chief economic adviser at SBI, said, “With multi-year low inflation and benign expectations ahead, we expect 125 bps rate cuts—75 bps in H1FY26 (June and August) and 50 bps in H2. Jumbo 50 bps cuts may be more effective than gradual 25 bps moves.”

The mainboard segment is seeing a pickup in activity, with two new IPOs set to launch after a quiet couple of weeks. The SME segment remains active with two IPOs opening for subscription, two ready to list, and one having listed on May 19.

Two mainline IPOs to hit the market this week

Belrise Industries, an auto parts manufacturer, is launching this week’s biggest IPO with a fresh issue worth Rs 2,150 crore. The company makes automotive sheet metal and casting parts, polymer components, suspension, and mirror systems for two-wheelers, three-wheelers, and four-wheel passenger and commercial vehicles.

The IPO opens on May 21 and closes on May 23, with an expected listing date of May 28. The price band is set between Rs 85 and Rs 90, with a lot size of 166 shares.

Belrise Industries supplies major customers like Bajaj, Honda, Hero, Jaguar Land Rover, Royal Enfield, Tata Motors, and Mahindra. As of June 30, 2024, it serves 27 global original equipment manufacturers (OEMs). The company has 15 manufacturing plants across nine cities in eight states.

The company has allocated not more than 50% for qualified institutional buyers (QIBs), not less than 35% for high net-worth individuals (HNIs), and not less than 15% for retail investors. In FY24, its revenue grew 14.1% YoY to Rs 7,555 crore. However, net profit slightly fell by 1.1% to Rs 352 crore due to higher raw material costs and inventory purchases.

The IPO funds will be used mainly to repay some outstanding borrowings and for general corporate purposes.

SMEs outshine mainline companies in FY24 profit growth

Another mainline IPO, Borana Weaves, is set to launch its IPO on May 20. The subscription will close on May 23, and the listing is scheduled for May 27. This fresh issue is valued at Rs 144.9 crore.

This textile company’s price band is Rs 205-216, and the lot size is 69 shares. 

Based in Surat, Gujarat, Borana Weaves manufactures unbleached synthetic grey fabric. This fabric is widely used as a base for further processing, like dyeing and printing, across industries such as fashion, traditional textiles, technical textiles, home decor, and interior design.

In FY24, the company’s revenue grew 44.7% YoY to Rs 199.6 crore, and net profit rose 47.3% to Rs 23.6 crore. The company plans to use the IPO proceeds to set up a new manufacturing unit in Surat to increase production capacity, support working capital needs, and cover general corporate expenses.

Additionally, two SME IPOs are set to open for subscription this week:

Dar Credit and Capital: This microfinance institution provides credit solutions to low-income individuals, particularly those in class-four jobs such as cleaners and peons in municipalities. Its IPO, a fresh issue worth Rs 25.7 crore, is priced between Rs 57-60 per share. The issue opens on May 21, closes on May 23, and is scheduled to list on May 28 on the NSE SME platform.

Unified Data-Tech Solutions: This IT software & consulting firm is set to open its IPO on May 22, with subscription closing on May 26 and listing scheduled for May 29 on the BSE SME platform. The company provides IT solutions such as data centers, virtualization, cybersecurity, and networking, catering to the banking, finance, and IT sectors. The Rs 144.5 crore IPO is a complete offer-for-sale, with a price band of Rs 260-273 per share.

Two SME IPOs are set for listing this week

Integrity Infrabuild, a road & highways developer, received bids for 2.1X the total shares offered in its IPO, with both retail and HNI categories subscribing 2.1X. The company is set to list on the NSE SME platform on May 20.

Accretion Pharma witnesses strong HNI and retail interest

Accretion Pharmaceuticals, a pharma company, saw overall subscription of 7.3X, with the retail category subscribing the most at 13.5X. The company is set to list on the NSE SME platform on May 21.

Virtual Galaxy witnesses strong listing in a volatile market

Virtual Galaxy Infotech, a software products and services provider, listed on May 19 at a 26.8% premium to its issue price of Rs 142. The IPO was heavily subscribed at 215.1X, with the HNI category bidding at 790.8X.

Virtual Galaxy locks in the upper circuit on debut

The company hit a 5% upper circuit post listing. It provides software products and services across the banking, finance, e-governance, and cloud computing sectors.