As many as five firms, including Mahanagar Gas and Equitas Holding, have received markets regulator Securities and Exchange Board of India (SEBI)’s approval in New Year to launch their initial public offerings (IPOs) to fund business expansion and meet working capital requirements.
GVR Infra Projects, GNA Axles and Maini Precision Products too have got green signal from SEBI to float their respective initial share-sale programme, according to a data compiled.
Together, these companies are expected to raise at least Rs 2,500 crore, sources said.
Most of these companies plan to utilise IPO proceeds for business expansion as well as working capital requirements.
Besides, the firms are taking the IPO route to achieve the benefits of listing the equity shares on the bourses.
Some of the firms believe the listing of the equity shares will enhance their brand name and provide liquidity to the existing shareholders.
All the five firms, which had filed their draft papers with the SEBI between September-November, received clearance from the regulator in January, as per information available with the regulator.
According to Prime Database Managing Director Pranav Haldea, the IPO market is expected to see flurry of activity in 2016 as there are 20 companies that have secured SEBI’s approval to raise Rs 7,315 crore, with 11 still on wait-list to mop up Rs 5,445 crore.
Besides, many more filings are expected in the near future, he added.
Quantum AMC Director I V Subramaniam said, “IPO market will depend on the equity markets scenario. Besides, pricing will play a crucial role.”
In 2015, there were as many as 20 main-board IPOs, which together pocketed about Rs 15,000 crore, making it the best period in the past few years in terms of fund raising through such plans.
In comparison, six IPOs had hit the market in 2014 and garnered just Rs 1,261 crore, while three firms had launched their public issues in 2013 to mobilise Rs 1,284 crore.
Individually, microfinance institution Equitas Holding’s IPO comprises fresh issue of shares worth Rs 600 crore and an equal amount by selling shares to existing shareholders, according to sources. Further, the firm is planning to garner Rs 300 crore by selling shares to institutional investors ahead of the IPO.
GVR Infra’s public issue comprises fresh issue of equity shares worth Rs 400 crore and an offer for sale, whereby IDFC Private Equity Fund would offload 43.22 lakh scrips.
Mahanagar Gas’ IPO would be of up to 24,694,500 equity shares. This included an offer for sale of up to 12,347,250 shares by state-run GAIL and of up to 12,347,250 shares by UK-based British Gas Asia Pacific Holdings Pte Ltd. The offer would also include a reservation for eligible employees.
The public issue of auto components maker GNA Axles consists of up to 63 lakh shares with a face value of Rs 10 each. It has reserved two lakh shares for its employees.
Maini Precision Products’ IPO comprises fresh issue of shares to raise up to Rs 50 crore and an offer for sale of up to 30.30 lakh shares by its promoters.