The IPO market picked up pace on Tuesday with three firms — InterGlobe Aviation, Teamlease and Infibeam — filing draft papers with the capital market regulator and hoping to mop up around Rs 4,000-4,300 crore together.
The IPO market picked up pace on Tuesday with three firms — InterGlobe Aviation, Teamlease and Infibeam — filing draft papers with the capital market regulator and hoping to mop up around Rs 4,000-4,300 crore together. That’s about twice the R2,200 crore that debutants on the bourses have raised in FY16 so far.
Most of the issues will see an exit — at times partial — by private equity players including KKR, Warburg Pincus, General Atlantic Partners and Standard Chartered PE and New Silk Route. As a result, many of the IPOs are a combined sale of both existing and new shares.
Although the stock market has been volatile over the past three weeks, bankers believe there will be appetite for these stocks. Last week, the Manpasand Beverages IPO, for R4,00 crore, was oversubscribed after a sluggish start. “IPOs are certainly returning… and it’s good to have a healthy IPO market otherwise too much money chasing limited paper could lead to an asset bubble,” said V Jayasankar, head, ECM, Kotak Investment Banking.
Merchant bankers are a busy lot with over 30 companies in the hunt for fresh money with value of paper seen at Rs 16,000-17,000 crore.
These include Coffee Day Enterprises which announced its issue last week, Matrix Cellular, GVK Airport, Lavasa, Rashtriya Ispat Nigam, Shree Pushkar Chemicals and Sadbhav Infrastructure.
InterGlobe Aviation, which runs the country’s biggest airline by market share IndiGo, is looking to raise Rs 3,200 crore — the current market capitalisation of rival Jet Airways. The fund-raising will value the carrier at Rs 21,200 crore. Teamlease, India’s largest temping firm, is looking to raise Rs 450-500 crore and Infibeam around Rs 400 crore.
Should these IPOs all be successful, it would mean a sizeable chunk of investor money being diverted from PSU disinvestments; in FY16, the government has so far raised Rs 1,610 crore from a 5% stake sale in REC compared with a target of Rs 69,500 crore.
InterGlobe Aviation, which runs IndiGo, looks to raise R3,200 cr.
Teamlease is looking to raise up to R500 cr and Infibeam around R400 cr.
Last week, Manpasand IPO was oversubscribed after a sluggish start