InvestorQ : Can you tell me about the big IPOs that are expected to hit the markets in India in the next one month?
vidhya Laxmi made post

Can you tell me about the big IPOs that are expected to hit the markets in India in the next one month?

sarah Leo answered.
2 weeks ago

Before we get into the forthcoming IPOs, let us first understand the reason for the scepticism. The general view is that IPOs in these markets would lead to negative listings. However, the data suggest something else. For instance, of the last 16 IPOs in the Indian market since February 2022, 14 are quoting at a premium to the issue price and only 2 IPOs (LIC and TMB) are trading at discount to the issue price. What is more encouraging is that IPOs of 2022 as a whole have given mean returns of over 50%.

There was a virtual drought of IPOs in June and July and it was only in August that IPOs started again. Of the 4 IPOs launched since August 2022, three IPOs got a tremendous response in terms of oversubscription. There are concerns over the series of IPO cancellations including some big names like PharmEasy, Macleods Pharma, MobiKwik and Go First. However, there is CMR Green Technologies IPO coming shortly and then there are 3 big IPOs in the coming one month.

The first is the IPO of Aadhar Housing Finance, which is expected in mid-October 2022. The approval of SEBI toom more than a year but has finally come in May this year. Aadhar is focused on the affordable housing segment, which generally has a high yield and a relatively low gross NPA level. The IPO size is Rs7,300 crore, comprising of a fresh issue of Rs1,500 crore and an offer for sale (OFS) of Rs5,800 crore. Aadhar is 98.7% by Blackstone. It has an AUM of Rs140,522 crore across 325 branches disbursing small ticket mortgage loans.

The second upcoming IPO is that of Five Star Business Finance Ltd; an offer for sale (OFS) of Rs2,752 crore. Its early investors include Matrix Partners, Norwest Ventures and TPG Asia. The IPO was approved in January 2021 itself. Five Star gives secured business loans to micro entrepreneurs and self-employed persons. It has 1.90 lakh customers with an AUM of Rs46,393 crore. Its loan book has grown at a CAGR of 65%, boosting profit growth. The IPO is expected to happen in the second half of October or first half of November this year.

Finally, the IPO of Le Travenues Technology (IXIGO) is likely to hit the markets in November 2022. The total fund raising will be Rs1,600 crore, which will comprise of Rs750 by way of fresh issue and Rs850 crore as offer for sale (OFS). IXIGO will use these fresh funds to fund its organic and inorganic growth. IXIGO is a comprehensive travel portal which allows the Indian travellers to plan, book and manage trips across rail, air, buses and hotels through a single interface. The IPO had also been approved quite some time back.