New Delhi: As many as 11 firms, including AGS Transact Technologies Ltd and ASK Investment Managers Pvt. Ltd, approached Securities and Exchange Board of India (Sebi) in August to raise over ₹ 7,000 crore through initial public offerings (IPOs), largely to fund their expansion projects and working capital requirement.
Studds Accessories Ltd, Senco Gold Ltd, Harsha Engineers Ltd, Mrs Bectors Food Specialities Ltd, Sansera Engineering Ltd, Dodla Dairy, Shyam Metalics and Energy, and Xelpmoc Design and Tech are the other companies that have filed preliminary papers with the market watchdog.
Together, these companies are estimated to garner over ₹ 7,200 crore through their IPOs, people aware of the matter said. Equity shares of these firms are proposed to be listed on BSE and NSE.
Most of the funds raised through the IPOs will be used for expansion plans, repayment of loans availed by these firms and to support working capital requirement, according to the draft papers filed by the respective companies with Sebi.
Some of the firms are taking the IPO route to provide exits to their existing shareholders like private equity and venture capital firms.
The IPO market has seen heavy activity so far in 2018 as 21 companies have mopped up close to ₹ 28,000 crore through initial share sales.
“The IPO market is buoyant for quality company issues which are priced cautiously. There is investor appetite for companies which price their IPOs keeping money-on-table for investors," said J. Kalyaniwala, vice-president of investment banking at Prabhudas Lilladher.
Experts said that a proactive regulatory environment coupled with buoyant investor sentiment was helping the IPO market. Sebi in its board meeting in June had decided to reduce the timeline for announcement of the IPO price band, which is further going to aid the IPO market. Under the new rules, the timeline for announcing price bands for initial share-sale offers will be reduced to two days from the current five days.
The year 2017 saw 36 companies collectively raising a record of over ₹ 67,000 crore through IPOs. The previous high was in 2010 when ₹ 37,535 crore was garnered, almost half the amount.