The current year 2017 may very well go down as one of the best years for IPO as India Inc raised more than 67,000 crore in the year in the primary market. “This year saw inflows of about $24 billion into Indian markets from local and overseas investors, all of which has been absorbed by an equivalent infusion of fresh paper, thereby helping mitigate the risk of an asset bubble,” V Jayasankar, head of equity capital markets at the investment banking unit of Kotak Mahindra Bank Ltd told Bloomberg, taking stock of India’s IPO market in the current year.
Year 2017 has seen the highest number of grossly oversubscribed issues. Latest to join the list of grossly oversubscribed issues is the IPO of Astron Paper and Board Mill Ltd which got subscribed by more than 243 times last week, and listed at a staggering 140% premium over issue price on BSE this morning. Notably, the IPO of Salasar Techno Engineering saw investor subscription to the tune of 273.05 times in July-17 for its Rs 36 crore IPO in July this year, making it the first company in over 17 years to be oversubscribed by more than 270 times, after Sankhya Infotech.
After such stellar response to IPOs in the current year, all focus and attention will shift to the major IPOs in the upcoming new year 2018. Interestingly, V Jayasankar expects the euphoria in the Indian primary markets to continue going forward, according to a Bloomberg report. We take a look at major IPOs to watch out for in New Year 2018.
HDFC Asset Management Company
After listing its life insurance business this year, the HDFC group is all set to come out with a public offer for its asset management business in 2018. Notably, the group had approved the stake sale via IPO in November this year. “We are listing it (the asset management business) in the first quarter,” Deepak Parekh said in an interview to livemint earlier last month. HDFC Asset Management Co. Ltd managed average assets of Rs 2.69 trillion in the quarter ended September. Post listing, HDFC will become the second asset management company to list in India after Reliance Nippon Asset Management Co. Ltd, whose IPO saw was subscribed 81.45 times in October this year.
After the IPO of BSE Ltd saw a great response in the current year all eyes will be on NSE’s upcoming offer. Accorsding to a Bloomberg report, The operator of the country’s dominant exchange shelved plans to list this year because of an investigation into whether the exchange gave high-frequency traders unfair access to its systems. “We have already mentioned that the IPO process is incumbent on the resolution of the process with Sebi, and we will duly inform the authority as per the procedures,” a spokesman for the bourse told Bloomberg. BSE Ltd IPO saw subscription of more than 51 times at close. The shares of Asia’s oldest stock exchange’s owners opened for trading at Rs 1,085 on 3 February 2017, at a stellar 34.6% premium to its offer price of Rs 806 per share.
In February this year, Finance Minister Arun Jaitley said that state-run railway companies such as IRCTC, IRCON and IRFC would be listed on stock exchanges soon. However, the plans were shelved, as the government wanted to sort out various financial issues facing both companies. According to a report in Business Standard, Railways Minister Piyush Goyal wants to first resolve the companies’ financial issues before they are listed. This will help the ministry get better valuations. “In the case of IRCTC, it is the service charge issue, and in IRFC’s case, it is about deferred tax liabilities. The Centre is looking to resolve these issues before the IPOs happen,” the newspaper quoted a source as saying.