The IPO space is in the thick of activity as 30 companies line up offers worth more than Rs. 16,000 crore to fund their business expansion, meet working capital requirements and make loan repayment.
At least 19 of them have already got green light from market regulator SEBI to launch their Initial Public Offers (IPOs), while draft IPO papers of eight firms are “under process” and may be cleared soon.
In addition, some companies like GVK Group’s airport business arm, GVK Airport Developers and staffing and training company TeamLease Services are expected to file their respective draft papers with SEBI soon.
GVK Airport Developers is estimated to raise Rs. 3,000 crore via IPO while TeamLease Services plans to mop up Rs. 500 crore through its public offer.
Maharashtra-based Navkar Corp will hit the capital market next week to raise Rs. 600 crore through its initial share sale plan and infrastructure firm Dilip Buildcon is also expected to launch its Rs. 650-crore IPO this month.
The flurry of activity in the IPO space follows stabilising trend in the stock market as companies are looking to raise funds to finance their business expansion and loan repayments and meet working capital requirements.
It also comes at a time when the regulator SEBI has announced a slew of fresh reforms on the IPO front, including halving the listing period to six days and making the application process for investors entirely cheque—free.
A majority of the companies that have approached SEBI are mid-sized and are looking to raise between Rs 200 crore to Rs 3,000 crore.
Since the beginning of 2015, as many as 24 companies have filed their draft papers to float IPOs. In the same period, the regulator has given approval to 25 firms to launch their initial share sale plans, some of which were pending from the previous year.
At the last count, just eight IPO draft papers were pending with SEBI for its ‘observations’, which are mandatory for any public issue to hit the market.
So far in 2015, 10 companies have mobilised about Rs 4,700 crore through IPOs, higher than funds raised in the preceding two years.
In comparison, a total of six IPOs had hit the market in 2014 and together garnered just Rs 1,261 crore while in 2013, three companies raked in Rs 1,284 crore through initial share sale plans.
Among forthcoming IPOs, InterGlobe Aviation, which runs budget carrier IndiGo, is eyeing Rs 2,500 crore, Coffee Day Enterprises plans to raise Rs 1,150 crore and RBL Bank — formerly known as Ratnakar Bank —— looks to mop up at least Rs 1,100 crore.
Others in the queue include Matrix Cellular, Catholic Syrian Bank, Alkem Laboratories, S H Kelkar & Company, Amar Ujala Publications, Infibeam Incorporation, AGS Transact Technologies, Numero Uno Clothing and Paranjape Schemes (Construction).