Diwali 2023: Seven mainboard IPOs expected this year post festive season

By Jael Hurley On Nov 11, 2023

The IPOs that hit the primary market after Diwali are Tata Technologies, Gandhar Oil Refinery India Ltd, Fedbank Financial Services Ltd, Indian Renewable Energy Development Agency Ltd (IREDA IPO), Flair Writing Industries Ltd, Allied Blenders & Distillers Ltd, and Mukka Proteins Ltd. .

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According to Kris Arun Kejriwal, Founder, Kejriwal Research and Investment Services a consultancy firm, the Diwali season started with a bang, and he had IPOs for the last three days, and it seems that right after Diwali we will be back to the top square with the number of issues that are tapping the market.

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Tata Technologies biggest and most significant IPO is coming soon; he is from the defense sector. Other companies in the banking sector include Fedfina, a Non-Banking Finance Corporation (NBFC) that specializes in gold loans and home financing. Other companies include Gandhar Oil Refinery India, which is involved in the chemical industry, Flair, which specializes in writing instruments, and consumer goods from the plastics segment.

Then, Allied Blenders & Distillers (ABD), a company in the liquor business that makes and markets its own alcohol, will have the chance to IPO. A few more smaller IPOs for ₹200-250 crore can also be achieved in the primary market; Mukka Proteins is one of them. The Indian Renewable Energy Development Agency (IREDA), a government-affiliated organization, is responsible for financing renewable energy sources such as solar, wind, hydro, and so on. It finances renewable energy and other sources of power, and is in the same league as PFC and REC. It supports the entire value chain in the power industry.

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“The IPO frenzy is expected to continue post Diwali with 5 new issues being offered including the much awaited Tata Technologies IPO. While the 9.57mn ($350-375mn) shares of the Tata Technologies IPO is a 100% offering and the ₹175-200 crore, the Mukka Proteins issue is a fresh 100 equity issue. Other issues are FedBank Financial Services ₹1,100 crore, Allied Blenders & Distillers ( ₹2,000 crore, Flair Writing Industries Ltd ₹745 crore and Gandhar screening ₹500 crores. In my opinion all the offers have good business prospects. However the IPO pricing will be the main determinant of the subscription decision,” said Vinit Bolinjkar, Head of Research, Ventura Securities Ltd.

With these IPOs approaching, let’s look at what to expect in terms of issue size, industry, business, peers, etc.

India Gandhar Oil Refinery Ltd IPO

The Gandhar Oil Refinery India IPO will open for subscription on Tuesday, November 21, and close on Thursday, November 23. The allocation to anchor investors for the Gandhar Oil Refinery IPO is scheduled to take place on Monday, November 20, according to reports. Gandhar Oil Refinery IPO price band is awaited.

India Gandhar Oil Refinery Ltd IPO comprises a fresh issue of shares up to ₹357 crore and an offer for sale (OFS) of up to 12,036,380 equity shares of face value ₹2 each by promoter and others.

According to the Draft Red Herring Prospectus (DRHP), Promoter Ramesh Babulal Parekh, Kailash Parekh, and Gulab Parekh would sell 2,250,000 equity shares each.

The company will use the net proceeds from the new issue to finance the following: invest in Texol through a loan to finance the repayment or prepayment of a loan facility obtained by Texol from the Bank of Baroda; capital expenditures through the purchase of equipment and civil work necessary to increase the motor oil capacity at our Silvassa Plant; expanding petroleum jelly capacity and the accompanying cosmetic products division at our Taloja Plant; expanding white oil capacity by installing blending tanks at our Taloja Plant; to fund our company’s working capital needs; and general corporate purposes.

Link Intime India Private Ltd is the registrar for the Gandhar Oil Refinery India IPO, with Edelweiss Financial Services Ltd and ICICI Securities Limited as the lead bookrunners.

The company’s listed industry peers are Savita Oil Technologies Ltd (with a P/E ratio of 8.25), Apar Industries Ltd (with a P/E ratio of 25.71), Panama Petrochem Ltd (with a P/E ratio of 9.49), Galaxy Surfactants Ltd (with a P/E ratio of 35.37), Privi Specialty Chemicals Ltd (with a P/E ratio of 47.21), Rossari Biotech Ltd (with a P/E ratio of 42.00), and Fairchem Organics Ltd (with a P/E ratio).

According to DRHP, the company is a leading manufacturer of white oils by revenue with an increasing focus on the consumer and healthcare end industries (Source: CRISIL Report).

Gandhar filed its draft prospectus in December last year. Gandhar Oil Refinery (India) received approval from the market regulator Securities and Exchange Board of India (SEBI) for its proposed IPO, in June.

Also Read: Gandhar Oil Refinery (India) gets green signal from Sebi to launch its proposed IPO; main highlights here

Fedbank Financial Services Ltd IPO

The Fedbank Financial Services Ltd IPO opens for subscription on Wednesday, November 22, and closes on Friday, November 24. The allocation of anchor investors for the Fedbank IPO is scheduled to take place on Tuesday, November 21, according to reports. The Fedbank Financial IPO price band is awaited.

Federal Bank Fedfina’s IPO arm comprises a fresh issue of equity shares up to value ₹750 crore offer and an offer for sale (OFS) of up to 70,323,408 equity shares from the promoters selling shareholders and the promoter group, which has a face value. ₹10 per equity share.

Federal Bank, the promoter shareholder, may sell up to 16,497,973 equity shares, and True North Fund VI LLP, the other shareholder, may sell up to 53,825,435 equity shares, of the offer for sale up to 70,323,408 equity shares.

Federal Bank’s Fedfina arm is one of five NBFCs in India that have been backed by private banks.

ICICI Securities Ltd, BNP Paribas, Equirus Capital Private Ltd, and JM Financial Ltd are the Lead Book Running Managers (BRLM) for the issue, while Link Intime India Private Ltd is the offer registrar.

Federal Bank’s FedFina arm DRHP filed for an IPO last year. However, the company pulled it out as it felt the market conditions were unfavourable. Now the company is rethinking capital raising options after earlier regulatory approval got lapsed, and filed papers with SEBI in July this year.

The company’s listed industry peers are Aptus Value Housing (with a P/E of 27.04), IIFL Finance (with a P/E of 14.52), Five Star Business Finance (with a P/E of 31.73), Manappuram Finance Limited (with a P/ E). of 7.28), and Muthoot Finance Limited (with a P/E of 14.29).

Also Read: Federal Bank arm Fedfina files papers with SEBI for IPO

Tata Technologies IPO

One of the most anticipated IPOs on the Street, Tata Technologies, a subsidiary of Tata Motors, filed an addendum to its DRHP with SEBI in October. Tata Technologies would offer 9.57 crore shares in its planned IPO at a face value of ₹2 per share, according to the addendum filed with SEBI.

Tata Motors will sell up to 8.11 crore shares through an offer for sale as part of the Tata Tech IPO, Alpha TC will sell up to 9.71 crore shares, and Tata Capital Growth Fund I will offer up to 48.58 lakh shares.

The company has selected financial firms such as JM Financials, Citi, and BoFA Securities to assist in the IPO process.

The company’s listed industry peers are KPIT Technologies Ltd (with a P/E of 83.10), L&T Technology Services Ltd (with a P/E of 40.92), and L&T Technology Services Ltd (with a P/E of 70.67).

Also Read: Tata Technologies IPO expected to launch soon. This is what experts feel could be in prices

Indian Renewable Energy Development Agency Ltd IPO (IREDA IPO)

Renewable Energy Development Agency of India’s first IPO is a public sector enterprise after the issue of Life Insurance Corp. in May 2022.

The IPO will comprise a fresh issue of up to 403.16 million shares and an offer for sale (OFS) of up to 268.78 million equity shares by the President of India, acting through the Ministry of new and renewable energy. The offer includes a reservation for employee donation.

According to the draft red herring prospectus (DRHP), the proceeds from the fresh issue will be used to increase its capital base to meet its future capital needs and to roll over loans.

The company has appointed IDBI Capital Markets & Securities Ltd, BOB Capital Markets Ltd, and SBI Capital Markets Ltd as managers of the issue.

The company’s listed industry peers are REC Ltd (with a P/E of 5.81), and Power Finance Corporation (with a P/E of 4.52).