IPO Review:Bajaj Housing Finance IPO vs Tolins Tyres IPO vs Kross IPO vs P N Gadgil IPO. Which one should you subscribe?

IPO Review: The mainboard space has been experiencing a surge in initial public offerings (IPOs) this September, signalling the onset of a lively festive season in the primary market. Between September 1, 2023 and September 6, 2024, a total of 87 listings (equivalent to 81%) have taken place on the mainboard, resulting in 71 stocks experiencing gains and 17 becoming multibaggers. Experts opine that the continuance of the IPO momentum hinges on several economic and market factors, such as the outcome of the forthcoming US elections, global economic conditions, and sustained economic growth in India.

This week, four mainboard IPOs, including Bajaj Housing Finance IPO, Tolins Tyres IPO, Kross IPO, and P N Gadgil Jewellers IPO, have opened for subscription. All of them have been fully booked and oversubscribed.

September is expected to be the biggest month for IPOsin 14 years, with around 16 businesses expected to hit the market, according to experts. This spike is being driven by robust secondary markets and strong investor demand; recent IPOs have seen strong returns.

Investors who are considering applying for investment opportunities or are still deciding which one is preferable can find the experts' opinions on each of them here.

Here's what expert says

Mohit Gulati, the CIO and managing partner of ITI Growth Opportunities Fund

Mohit Gulati shared some fascinating perspectives, delving into each of them extensively.

Starting with Tolins. Gulati explained that it is a company with high Return on Equity (RoE) and Return on Capital Employed (RoCE), and strong distribution that leads to healthy margins. Its valuation seems reasonable in this market, so I recommend subscribing to it. From a long term perspective its a stock to hold vs dump on listing gains.

Talking about Kross IPO, Mohit highlighted that Kross has shown strong performance over the past few years in the commercial vehicle sector. In my view, the issue is fully priced, so there might be limited upside for investors in the long term. I would wait for some pullback before considering entry at slightly lower levels. Subscribe to the issue for purely listing gains.

When it comes to P N Gadgil Jewellers, Gultati, who is from Pune, mentioned that they have been familiar with this brand for many years.

Mohit said that it's amazing to see a 6th generation family-run business enter the market. From a valuation perspective, I think the issue is priced well compared to its peers.

"It seems like a good option for listing gains, but for the long term, I would prefer Senco over P N Gadgil," highlighted Gulati .

Moving on to the big one of the week - Bajaj Housing Finance. It benefits from the strong franchise of the Bajaj Group. The market has established that this group, with its ability to use AI ahead of time, underwrites well, and is supported by a strong recovery mechanism. It is possibly the best Non-Banking Financial Company (NBFC) play in India. I would be surprised if anyone on the street avoids this IPO, said Mohit Gulati.

Arun Kejriwal, the founder of Kejriwal Research and Investment Services

Simplifying each of them, Arun Kejriwal said that Bajaj Housing Financing is a non-deposit housing financing firm and that Punjab National Bank Housing Finance is its closed opponent. It is without a question one of the best among the others.

When speaking about Tolin Tyres, Kejriwal stated that the firm produces tread rubber in addition to new tyres. The company's biggerbusiness in the United Arab Emirates is tread rubber, and it is the only company operating in the country.

Further, Arun elaborated, saying that the third business is Kross, which manufactures axles and suspensions for agricultural machinery and medium- and heavy-duty commercial vehicles (M&HCV). Fourth, P N Gadgil Jewellers is a jeweller with larger volumes but lower margins. This brand is native to Maharashtra and is available in all 39 locations.

Arun straightforwardly stated that comparing the four companies among themselves is like comparing apples and oranges, so it's not possible. From a market perspective, if I have to pick one out of the four, undoubtedly, Bajaj Housing Finance IPO would be the choice. Moreover, if one is looking to generate profit and doesn't necessarily need to choose the best, there are two companies with small issue sizes, one being trade-to-trade, i.e., Tolin Tyres. Trade-to-trade signifies high-risk, high-return companies. However, it will be dependent on the subscriptions and response the company receives.

Kross has a minimal presence in exports with only around ₹8 crores in revenue numbers as of March 2024, which is currently the driving force for the company. The company foresees a significant focus on exports in the future and has already received orders for some products that have been validated, with expectations for this to be reflected in the upcoming years. Apart from Bajaj Housing Finance, there are opportunities to choose where one wants to generate profits.

Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities

To make things easier for investors, Prashanth Tapse has placed each one in a certain order.

According to Tapse, among the four IPOs, Long-term investors find Bajaj Housing more appealing because of its solid business plan, excellent asset quality, and AAA paper. This offer also allows investors to participate in one of the top participants in the housing financing market in India. The second-best deal appears to be from P N Gadgil Jewellers Ltd., which is the second-largest organised jewellery market participant in Maharashtra and is well-known among the clients it has serviced to this day as a household name in fashion jewellery.

Kross IPO was ranked third by Tapse, which also described it as a diversified and niche player with a focus on producing and supplying trailer axle and suspension assemblies as well as a variety of forged and precision products. The company's tagline, SUBSCRIBE WITH RISK, refers to the company's aggressively priced near-term triggers, based on FY24 earnings.

Tolins Tyres Ltd is a mid-sized maker of new tyres and tread rubber that has established itself as a significant provider of tyre retreading solutions across India and sold to 40 international countries, according to Prashanth, the fourth IPO offer. With the slogan of SUBSCRIBE WITH RISK, he suggests that investors who are willing to take a chance should save their money for the long run since the value, which is based on FY24 results, looks to be fully priced in the short term triggers.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.