Primary Market Update
The primary market will experience a mix of activities in the upcoming week starting from September 30, 2024. While there will be no fresh Initial Public Offerings launches in the mainboard segment, there is significant action within the SME segment. With multiple IPOs opening for subscription and several companies preparing for listings, the week is set to be busy for investors.
Mainboard Segment: Key IPO Closures and Listings
The week kicks off with Diffusion Engineers’ Initial Public Offerings closing on September 30. Diffusion Engineers, a key player in welding consumables and heavy machinery, opened its Rs 158-crore IPO and has already received an overwhelming response with a subscription rate of 27.19 times as of September 27.
On the listing front, Manba Finance, a non-banking finance company, will make its debut on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on September 30. On October 3 and October 4, respectively, the shares of Refrigeration and Diffusion Engineers and KRN Heat Exchanger will go up for trade.
The grey market has been buzzing with activity surrounding these. KRN Heat Exchanger [Initial Public Offerings] shares attracted a staggering 125% premium over their issue price. Meanwhile, Manba Finance and Diffusion Engineers shares were trading at more than a 30% premium according to market observers.
SME Segment: New to Open for Subscription
Next week will see a flurry of initial public offerings (IPOs) in the SME market, with some of them opening for subscription.
Paramount Dye Tec
Opening on September 30, Paramount Dye Tec, a Ludhiana-based yarn producer for the textile industry, will launch its Rs 28.4-crore maiden IPO. With a price band set between Rs 111-117 per share, this will close on October 3. The company has already raised Rs 8.09 crore from four anchor investors.
Subam Papers IPO
Subam Papers, based in Tamil Nadu, will also launch its Rs 94-crore IPO on September 30. The price band has been fixed at Rs 144-152 per share, and the issue will close on October 3. The company raised Rs 26.7 crore via its anchor book on September 27.
NeoPolitan Pizza and Foods IPO
The smallest IPO among the new SME offerings, NeoPolitan Pizza and Foods, aims to raise Rs 12 crore through its fixed-price issue, with shares priced at Rs 20 each. This IPO will open on September 30 and close on October 4.
IPOs Closing Next Week
Several other IPOs will close their subscriptions by the end of next week. These include:
Nexxus Petro Industries
Forge Auto International
Sahasra Electronics Solutions
Divyadhan Recycling Industries
September 30 is the last day to subscribe to these initial public offerings. Meanwhile, the IPOs for Saj Hotels and HVAX Technologies will close on October 1.
As of September 27, Nexxus Petro Industries had been subscribed 1.66 times, Forge Auto International had received a 9.87 times subscription, Sahasra Electronics Solutions saw a 12.9 times subscription, and Divyadhan Recycling Industries reached 4.52 times subscription.
SME Listings Next Week
The upcoming week will also witness multiple SME listings. Shares of Rappid Valves India and WOL 3D India will begin trading on the NSE Emerge platform effective September 30. This will be followed by the listing of Thinking Hats Entertainment Solutions, Unilex Colours and Chemicals, and TechEra Engineering on October 3.
On October 4, four companies will debut on the exchanges:
Nexxus Petro Industries on the BSE SME
Forge Auto International
Sahasra Electronics Solutions
Divyadhan Recycling Industries on the NSE Emerge
Anticipated to List with a 50% Premium in Manba Finance’s IPO
Manba Finance, known for providing loans in the two- and three-wheeler segments, is expected to debut with a strong listing on September 30. Analysts predict that the stock will list at a premium of up to 50% over the upper band of its issue price, which was Rs 120 per share.
In the grey market, the stock has been commanding a 50% premium, indicating robust investor interest. Analysts believe that the stock may open between Rs 175-180 per share, reflecting a listing gain of around 45%. However, some experts, like Akriti Mehrotra of Stoxbox, suggest a more modest premium of 30-35%.
Investment experts advise investors to hold onto the stock for the long term. The firm is priced appropriately, according to Anand Rathi Shares Head of Fundamental Research Narendra Solanki, with a post-issue market valuation of Rs 602 crore and a return on net worth of 15.66%.
214.42 Times Subscription Closes KRN Heat Exchanger IPO
The stock launch of KRN Heat Exchanger and Refrigeration was met with overwhelming demand, receiving a 214.42 times subscription by the close of bidding on September 27. Investors purchased a total of 235.71 crore equity shares compared to the 1.09 crore shares on offer.
Non-institutional investors led the way, subscribing 431.63 times their allotted quota, while qualified institutional buyers followed with a 253.04 times subscription. Retail investors also showed strong interest, subscribing 98.29 times their quota.
The stock launch raised Rs 341.95 crore through the issue of 1.55 crore new shares, with the funds primarily earmarked for a new manufacturing facility in Alwar, Rajasthan. Trading in KRN Heat Exchanger shares will begin on October 3.
Strong Momentum in the IPO Market Ahead
Looking beyond next week, the primary market remains vibrant with a slew of IPOs scheduled for the coming months. Some of the high-profile companies expected to launch IPOs in October and November include:
Hyundai Motor India: Set to raise Rs 25,000 crore, which could surpass LIC’s stock launch to become India’s largest-ever public offering.
Swiggy: The food delivery giant plans to raise Rs 10,414 crore through a combination of fresh issue and offer-for-sale (OFS).
NTPC Green Energy: The renewable energy arm of NTPC aims to raise Rs 10,000 crore.
Other companies preparing to enter the market include Afcons Infrastructure, Waaree Energies, Niva Bupa Health Insurance, One Mobikwik Systems, and Garuda Construction.
Market experts predict that more than 30 IPOs will be launched between the end of September and December, spanning across various sectors and market segments. This surge is driven by strong macroeconomic fundamentals, robust inflows into mutual funds, and a healthy capital formation environment in corporate India.
IPO Outlook for 2025
The IPO market outlook for 2025 remains positive. The Securities and Exchange Board of India (SEBI) has already approved 22 IPOs for next year, with companies planning to raise approximately Rs 25,000 crore. Moreover, over 50 companies have filed draft papers and are awaiting regulatory approval, targeting to raise more than Rs 1 lakh crore cumulatively.
As the primary market continues to experience strong demand, investors and issuers alike remain optimistic about the growth potential in the coming years.
Note
The primary market is set to remain active in the coming weeks, with multiple IPOs closing and listings scheduled. The strong demand seen in recent IPOs, particularly in the SME segment, reflects robust investor confidence. Additionally, the upcoming mega-stock launch plans from companies like Hyundai and Swiggy are expected to maintain the market’s momentum into the end of the year. With a favorable market environment and continued investor interest, the primary market looks poised for significant activity and growth heading into 2025.
Exciting stock launch Opportunities in the Upcoming Months: Hyundai, Swiggy, and More
The next few months are set to bring a wave of excitement for investors as some of the biggest companies in India gear up to enter the public markets. Notable names like Hyundai Motor India, Swiggy, Waaree Energies, NTPC Green Energy, and even the National Stock Exchange (NSE) are expected to launch their Initial Public Offerings (IPOs). These high-profile IPOs will offer investors a chance to own a piece of these industry leaders, each from a different sector, thereby presenting a variety of investment opportunities.
While these mega-Initial Public Offerings are creating anticipation in the market, the coming weeks also promise action in the SME sector, with several smaller but potentially lucrative IPOs lined up. In this article, we will take a closer look at some of the upcoming SME Initial Public Offerings that are set to hit the market next week, including Subam Papers, Paramount Dye Tec, and NeoPolitan Pizza and Foods.
1. Subam Papers IPO
One of the most anticipated SME IPOs next week is that of Subam Papers, a Tamil Nadu-based Kraft Paper manufacturer. The IPO will open for subscription on September 30, 2024, and remain available for investors to bid until October 3, 2024.
Key Details of the Subam Papers IPO:
- Price Band: The company has set a price band of Rs 144-152 per share.
- Lot Size: Investors can bid for 800 shares in one lot and in multiples thereafter.
Subam Papers specializes in manufacturing Kraft Paper, a material widely used in the packaging industry. What sets Subam Papers apart is its environmentally conscious production process, as the company primarily uses waste paper as its raw material. This positions Subam Papers as a key player in the sustainable packaging sector, which is experiencing increased demand due to the global shift towards eco-friendly alternatives.
As of March 2024, Subam Papers has an installed capacity to produce 300 metric tons per day (MTPD) of Kraft Paper. This brings the company’s total annual production capacity to 93,600 metric tons, ensuring a significant supply to meet growing market demand.
IPO Lead Manager and Registrar:
- Lead Manager: Gretex Corporate Services is the book-running lead manager for the Subam Papers IPO.
- Registrar: Bigshare Services will serve as the IPO’s registrar.
Investors interested in the paper manufacturing sector or those looking for sustainable investments may find Subam Papers IPO an attractive opportunity.
2. Paramount Dye Tec IPO
Another SME IPO opening next week is Paramount Dye Tec, which will be available for subscription from September 30 to October 3, 2024. The company has set its price band between Rs 111-117 per share.
Key Details of the Paramount Dye Tec IPO:
- Price Band: Rs 111-117 per share.
- Lot Size: Investors can bid for shares in lots.
Paramount Dye Tec is a manufacturer of yarns, catering to the business-to-business (B2B) segment of the textile industry. What makes Paramount Dye Tec stand out is its focus on sustainability. The company primarily produces yarns by recycling waste synthetic fibers, turning industrial waste into high-quality, durable products. This aligns well with the global trend of sustainability in manufacturing, making the company a promising player in the textile industry.
Paramount Dye Tec’s product range includes various types of yarns such as:
- Acrylic
- Polyester
- Nylon
- Wool
- Acrylic blend yarns These yarns are widely recognized for their superior quality and durability, catering to businesses in the textile and fashion industries.
With sustainability becoming a key focus for global manufacturers, Paramount Dye Tec’s business model of recycling synthetic waste positions it well for future growth. The company’s ability to turn waste into valuable products gives it a competitive advantage, and this IPO offers investors the chance to be part of a growth story in the sustainable manufacturing sector.
IPO Lead Manager and Registrar:
- Lead Manager: Gretex Corporate Services
- Registrar: Bigshare Services
For investors keen on the textile industry, especially those with a focus on sustainability, the Paramount Dye Tec IPO offers an opportunity to invest in a growing sector with environmental consciousness at its core.
3. NeoPolitan Pizza and Foods IPO
For investors looking to diversify into the food and hospitality sector, NeoPolitan Pizza and Foods presents a unique opportunity. This SME IPO will open for subscription on September 30, 2024, and close on October 4, 2024.
Key Details of the NeoPolitan Pizza and Foods IPO:
- Issue Size: The IPO will consist entirely of a fresh equity sale of 60 lakh shares.
- Price Band: Shares are priced at Rs 20 per share at the upper end.
- Lot Size: Investors can bid for 6,000 shares in one lot.
NeoPolitan Pizza is part of the food service industry, operating in the quick-service restaurant (QSR) segment. The company’s focus is on providing quality pizza and other fast food options to customers. As the QSR industry continues to grow in India, driven by changing lifestyles and urbanization, NeoPolitan Pizza is well-positioned to capitalize on this trend.
With food and beverage being a high-growth sector, especially in the fast-food segment, NeoPolitan Pizza has the potential to expand rapidly in both urban and semi-urban areas. The funds raised through this IPO will help the company scale its operations and improve its infrastructure to meet increasing demand.
IPO Lead Manager and Registrar:
- Lead Manager: Turnaround Corporate Advisors is the book-running lead manager for this IPO.
- Registrar: Bigshare Services
Investors with an interest in the food and QSR sector can look to NeoPolitan Pizza and Foods IPO as an exciting investment opportunity with growth potential in a fast-paced, dynamic market.
Outlook for Upcomings: Hyundai, Swiggy, NTPC Green, and More
While the SME IPOs are garnering attention next week, the excitement in the Indian stock market will continue as several large companies prepare to hit the bourses in the coming months.
Hyundai Motor India
One of the most anticipated IPOs is that of Hyundai Motor India, which is expected to be India’s largest-ever IPO, surpassing even LIC’s massive offering. Hyundai Motor India, the Indian arm of the South Korean automobile giant, is reportedly targeting to raise Rs 25,000 crore through this IPO. The issue will be an offer-for-sale (OFS) of Hyundai’s shares, with no fresh issue of stock.
Swiggy IPO
Another eagerly awaited is from Swiggy, the food delivery and grocery platform, which is expected to raise Rs 10,414 crore. It will be a mix of fresh shares and offer-for-sale. With Swiggy dominating India’s food delivery market alongside Zomato, this IPO is expected to generate significant investor interest.
NTPC Green Energy IPO
The renewable energy arm of NTPC, NTPC Green Energy, is also gearing up for its IPO, which is expected to raise around Rs 10,000 crore. As India focuses on boosting its renewable energy capabilities, NTPC Green Energy is likely to play a pivotal role in the country’s energy transition, making this IPO an attractive opportunity for environmentally-conscious investors.
Conclusion: A Busy Season Ahead for Investors
With a mix of large-cap and SME IPOs on the horizon, the next few months are set to be an exciting time for investors. The SME IPOs of Subam Papers, Paramount Dye Tec, and NeoPolitan Pizza and Foods provide opportunities for investors looking for smaller, niche companies with growth potential. At the same time, the upcoming mega-IPOs of Hyundai Motor India, Swiggy, and NTPC Green Energy promise to bring significant action to the primary market, attracting a wide range of investors.
As always, investors are advised to carefully evaluate each offering, considering the financials, industry position, and future growth potential of the companies before making investment decisions. Whether you’re looking at the sustainable packaging sector, textile recycling, fast food, or renewable energy, there’s plenty to look forward to in the IPO market in the coming months.