This week will witness a flurry of activity on the primary market as five companies are set to initiate Initial Public Offerings (IPOs) valued at more than ₹7,000 crore.
Experts suggested that investors subscribe to these issues at least for listing gains, noting that the positive sentiment in the secondary market may assist these initial public offerings. According to bankers, given the limited amount of money available for investments, retail investors might give consideration to companies like Tata Technologies and IREDA over others.
According to bankers, the influx of initial public offerings (IPOs) in this brief timeframe is not expected to negatively impact the liquidity of the primary markets. “The market as a whole might not be impacted, but money from one issue might not be available for the other,” stated Satyen Shah, president of Nuvama Investment Banking and Fixed Income.
“The inflows from an institutional and HNI level may not be a worry since they have enough capital, but at retail level due to a limited corpus, we may see some discretion from investors based on the valuation and sectors of the companies.” said analysts for their opinions.
Tata Technologies IPO
IPO Size: ₹3,042 crore
Price Band: ₹475-500
Open-Close Date: November 22 – 24
Given its growth potential and affordable valuations in comparison to peers, analysts advise investing in the first initial public offering (IPO) from the Tata Group in more than 20 years. According to IDBI Capital, which rates the Tata Technologies IPO as “subscribe,” the company is valued at 33 times FY23 earnings compared to peers’ 63 times. Market analysts predicted a strong demand for the product. Arun Kejriwal, the founder of KRIS, an investment consulting firm, stated that Tata Tech is the most anticipated of the lot and will receive the highest subscription, but it will be difficult for small retail investors to get any allotment.
Read also: Ratnaveer Precision Engineering IPO: Price, Date & GMP
IREDA IPO
IPO Size: ₹2,150 crore
Price Band: ₹30-32
Open-Close Date: November 21 – 23
Experts advise investing in this state-owned finance company’s initial public offering (IPO), which provides funding for renewable energy initiatives. According to SBI Securities, the company is well-positioned to benefit from the government’s heightened emphasis on renewable energy, with a target of 50% renewable energy by 2030. “IREDA may become the favoured issue of investors for reasons like an affordable price band, and good performance in the last two years due to government push to the industry,” stated Kejriwal. According to SBI Securities, the company is valued at a price-to-book ratio of 1.1 times at the upper end of the price range. Apurva Sheth, head of research at Samco Securities, advises subscribing for listing gains.
Gandhar Oil Refinery IPO
IPO Size: ₹500 crore
Price Band: ₹160-169
Open-Close Date: November 22- 24
The IPO of Gandhar Oil, which produces goods for the lubricant, personal care, and medical industries, among others, has generated conflicting opinions among analysts. Some believe the IPO may not be the best option for long-term investors at the issue price, while others advise subscribing to the issue for listing gains with the stock trading at a 30% premium over the issue price in the grey market. “Gandhar Oil can be compared to Galaxy, which has done well, despite being an expensive share,” Kejriwal stated.
Flair Writing Industries IPO
IPO Size: ₹593 crore
Price Band: ₹288- 304
Open-Close Date: November 22- 24
Market players anticipate that investors will take Flair’s IPO more seriously in light of Cello World’s recent success and listing. “The recent success of the Cello World IPO will rub-off on the Flair Writing Industries’ offer, and investors may flock for it with the same kind of expectations,” stated Kejriwal. Cello World’s shares have listed at a 28% premium over issue price on November 6.
Read also:Rishabh Instruments IPO: Price, GMP & other details
Fedbank Financial Services IPO
IPO Size: ₹1,092 crore
Price Band: ₹133- 140
Open-Close Date: November 22- 24
The Reserve Bank of India’s (RBI) decision last week to increase risk weights on cash credit, personal loans, and consumer durable loans by lenders has affected sentiment in the sector, according to analysts, so long-term investors may want to proceed cautiously when considering the IPO of Fedbank Financial Services, a non-banking finance company promoted by Federal Bank. “Fedbank, while may not be directly affected due to the recent RBI circular on lending, we expect to see an impact on the entire banking sector,” stated Kejriwal. Sheth of Samco suggests subscribing to the IPO for listing benefits alone. “Looking at the DRHP and company financials, we will mostly recommend a subscribe or subscribe for listing gains,” he stated.
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