New Delhi: As many as five companies, including Mahanagar Gas Ltd and Equitas Holding Ltd, have received markets regulator Securities and Exchange Board of India’s (Sebi) approval in the New Year to launch their initial public offers (IPOs) to fund business expansion and meet working capital requirements.
GVR Infra Projects, GNA Axles Ltd and Maini Precision Products Pvt. Ltd too have got green signal from Sebi to float their respective initial share-sale programme, according to data compiled. Together, these companies are expected to raise at least ₹ 2,500 crore, people familiar with the matter said.
Most of these companies plan to utilise IPO proceeds for business expansion as well as working capital requirements. Besides, the firms are taking the IPO route to achieve the benefits of listing the equity shares on the bourses. Some of the firms believe the listing of the equity shares will enhance their brand name and provide liquidity to the existing shareholders.
All the five firms, which had filed their draft papers with Sebi between September and November, received clearance from the regulator in January, as per information available with Sebi. According to Prime Database managing director Pranav Haldea, the IPO market is expected to see flurry of activity in 2016 as there are 20 companies that have secured Sebi’s approval to raise ₹ 7,315 crore, with 11 still on the wait-list to mop up ₹ 5,445 crore.
Besides, many more filings are expected in the near future, he added. Quantum AMC director I.V. Subramaniam said, “IPO market will depend on the equity markets scenario. Besides, pricing will play a crucial role." In 2015, there were as many as 20 main-board IPOs, which together pocketed about ₹ 15,000 crore, making it the best period in the past few years in terms of fund raising through such plans.
In comparison, six IPOs had hit the market in 2014 and garnered just ₹ 1,261 crore, while three firms had launched their public issues in 2013 to mobilize ₹ 1,284 crore. Individually, microfinance institution Equitas Holding’s IPO comprises fresh issue of shares worth ₹ 600 crore and an equal amount by selling shares to existing shareholders, according to people familiar with the matter.
Further, the firm is planning to garner ₹ 300 crore by selling shares to institutional investors ahead of the IPO. GVR Infra’s public issue comprises fresh issue of equity shares worth ₹ 400 crore and an offer for sale, whereby IDFC Private Equity Fund would offload 43.22 lakh scrips. Mahanagar Gas’ IPO would be of up to 24,694,500 equity shares. This included an offer for sale of up to 12,347,250 shares by state-run GAIL (India) Ltd and of up to 12,347,250 shares by UK-based British Gas Asia Pacific Holdings Pte Ltd.
The offer would also include a reservation for eligible employees. The public issue of auto components maker GNA Axles consists of up to 63 lakh shares with a face value of ₹ 10 each. It has reserved two lakh shares for its employees. Maini Precision Products’ IPO comprises fresh issue of shares to raise up to ₹ 50 crore and an offer for sale of up to 30.30 lakh shares by its promoters.