All You Need to Know About Latest and Upcoming IPOs
An IPO is an initial public offering when a privately owned company decides to make its shares available to the public by listing it on stock exchanges. Companies make big money with their share prices going up when they go public and people see IPOs as a great opportunity to invest. There is an IPO boom in India. The calendar year 2021 had been considered a record year for IPOs in India, but some of the highly anticipated ones are now pushing back their IPO launch and reevaluating the situation. It is estimated that around 38% of the companies that came out with IPOs over the past year are trading below their listing price.
While IPOs are the investment trend now and it is without doubt a good opportunity, it is also a very risky investment and at times delivers inconsistent results in the long run.Investors need to be very cautious about where they are investing their hard earned money.
It is not all bad news though. In the stock marketit’s all about timing, and it is the same with IPOs. Making aninvestment decision on IPO is a difficult one. You have to know the basics about the business you want to invest in and you have to decide how much risk you can take. We will help you with the question and look at some of the latest and upcoming IPOs in India this year.
Latest Trends in IPO
While 2021 has been literally the year of IPOs, it has also brought to light some interesting trends in IPO. In terms of the number of IPOs, IT, finance, real estate, consumer products, retail, real estate, and construction sectors have been very active. There is a growing trend of offer for sale (OFS). This is generally a cause of concern when the original promoters completely or partially exit from the company. One reason is that the funds raised through OFS are almost never invested back into the company and is retained by the shareholder. Only 36% of the total IPO funds raised in 2021 were through fresh issuances and only four companies had IPO with 100% fresh issuance. About 15 companies raised funds with 100% OFS and 49 companies had 50% OFS in their IPOs. For people looking to invest in IPOs, there is no assurance that the funds from IPOs will be utilized for the company when there is a higher OFS component. There are venture capital and private equity firms also exiting via IPOs. Also, while everything about an IPO might seem attractive, the investors are left wondering about the actual reason for the promoters exiting the company.
SEBI has been observing these trends and putting regulations in place. SEBI has proposed that only 50% of the stock held by majority shareholders can be sold through OFS. Only 35% of the total issue size can be utilized for acquisitions and corporate purposes. Credit rating agencies should also monitor the utilization of funds from IPOs. SEBI has put these measures forward to protect the interest of the retail individual investors participating in IPOs, which has grown to over seven crores in 2021. SEBI has also increased the lock-in period of a part of the shares held by the anchor investors to 90 days.
Investing in IPOs comes with its own risks, as is the case in any investment. But the risks are more with IPOs than buying the shares of established listed companies because there is less data available on private companies for the investors to make decisions on.
Latest IPOs in India
List of the 10 most recent listed IPOs in India
|Listed Date||IPO Name||Issue Price||Opening Price||Closing Price||CMP||Current Gains in %|
Nuuu is reviewing three of the companies that had IPOs over the last 30 days.
Hariom Pipe: Hariom Pipes is based in Hyderabad, Telangana. It is a part of the Hariom Group, founded in 1962 by HariomGolas. The company manufactures iron and steel pipes and tubes, scaffolding systems, hot rolled coils, etc. They have two plants, one in Telangana and one in Andhra Pradesh with a total installed manufacturing capacity of around three lakh metric tons per year. They cater to the housing, infrastructure, automotive, power, agriculture and cement industries. Hariom Pipes is a regional player focusing on parts of South India and is planning expansion into nearby geographical areas to offset transportation cost. They also have plans of expanding their manufacturing capacity and product range, thus increase market reach and improve margins.
They have integrated operation with all products manufactured in-house. The production facilities are strategically placed close to source of raw material, which has resulted in lowerproduction cost and competitivepricing of products. They can manufacture products according to customer demand and market needs and thus cater to needs of diverse customers. The company has a growing sales and profits resulting in rising net cash flow and cash from operations. The company has been using its capital effectively to generate profits and has been reducing debt.
The company has relied almost exclusively on big customers with the top 10 customers accounting for over 60% of revenues. The cyclic nature of the industry and the ongoing inflationary environment are risks that need to be considered. There is also stiff competition from other Indian manufacturers.
The Hariom Pipe Industries IPO opened on March 30th 2022 and closed on April 5th 2022. The company plans to use the proceedings from the IPO toward funding capital expenditure and working capital requirements. The Hariom Pipe Industries IPO subscribed 7.93 times on April 5, 2022 and public issue subscribed 12.15 times in the retail category. Their revenues have grown by around 180% from FY 2019 to FY 2021, but the expenses have also grown by around 190% during the same period. This has affected the profit margins, which has gone down slightly although the net income has shown growth for the period.
Eighty Jewellers: Eighty Jewellers is into trading of gold, silver, and platinum ornaments with precious and semi-precious stones, along with watches and other luxury articles. They cater to customers from value, mid and high end segments. Eighty Jewellers was incorporated in 2010 and is the master franchisee of AnopchandTilakchand Jewellers Pvt. Ltd. from 2021. The company is headquartered in Raipur, Chhattisgarh. The company has showrooms at Korba and Bilaspur in Chhattisgarh.
The IPO opened on 31st March 2022 and closed on 05th April 2022. The total IPO size was 11.07 crores. The revenues of the company did slip slightly from FY 2019 to FY 2021, but the profits grew nearly 376% during the same period.
Veranda Learning: Veranda Learning offers an integrated blended learning platform. They have courses for students, professionals, and aspirants. They have online through videos and live classes, offline with classroom teaching, and a hybrid format which is a combination of online and offline modes of learning. Veranda offers preparatory courses for UPSC and state PSC exams, banking, railway, and chartered accountancy. They believein providing affordable, high-quality education in an outcome oriented approach. The company is based in Chennai, Tamil Nadu and has centres spread through Tamil Nadu and Kerala. The company was incorporated in 2018. They are a strictly regional player.
Edutech industry is growing in India. With a highly changing and demanding job environment, there is a need for constant requirement for professionals to learn additional skills, and job aspirants need to prepare themselves for competitive exams. Veranda offered these courses over various modes. Veranda learning acquired Edureka, which has more than 30 lakh subscribers in their YouTube channel. They have a huge archive of digital contents, study materials, and various tests available. Valuation of edutech companies are on the rise. But it’s a highly competitive industry with new and established players. Attracting and retaining students are a challenge.
The Veranda Learning IPO was opened for subscription on 29th March 2022 and closed on 31st March 2022. It was subscribed 3.53 times. The market was sceptical because the financials of the company were not in best health,bottomline was negative, and competition in the education sector. The IPO size was INR 200 crores. The overall response to the IPO was dismal.
Upcoming IPOs in India
List of 10 Upcoming IPOs in April/May 2022
|IPO Name||IPO Size (Cr.)||Tentative Opening|
|Life Insurance Corporation (LIC)||66,000||April / May 2022|
|National Stock Exchange (NSE)||10,000||April / May 2022|
|OYO Rooms||8430||April / May 2022|
|Delhivery||7460||April / May 2022|
|OLA Cabs||7300||April / May 2022|
|EmcurePharma||4500||April / May 2022|
|Go Airlines||4600||April / May 2022|
|Penna Cements||1550||April / May 2022|
|ESAF Small Finance Bank Ltd.||998||April / May 2022|
|Hexagon Nutrition||600||April / May 2022|
Nuuu is reviewing three of the companies that have IPOs upcoming over the next 30 to 60 days.
Delhivery: Delhivery is one of India’s largest and fastest growing logistic services provider. It is a fully integrated company and offers the full range of logistic services to include express parcel delivery, heavy good, partial and full truck load freight, warehousing, and supply chain solutions. Delhivery delivered around 20% of the total e-commerce volume in India during the first quarter of 2022.They also offers e-commerce return services, payment collection and processing, and installation and assembly services. They have reduced their dependency on any single line of business with their wide range of services.
Delhivery has 124 large logistic gateways, out of which 21 have automated sorting systems, 83 fulfillment centres, over 2000 self-managed centres, over 1000 partner centres, and over 60,000 people working for them.
Delhivery has diversified across different industry verticals, in spite of which they rely heavily on ecommerce. They also have a huge dependency on their network partners and third party providers for transportation and manpower. Dependence on large customers is also a risk.
EmcurePharma: EmcurePharmaceuticals was founded in 1984 and is one of India’s leading pharmaceutical companies with 350 brands, 14 manufacturing facilities, five R&D centres, over 500 scientists, . They have a presence in all major therapeutic areas including gynaecology, cardiology, blood-related, oncology, HIV, etc. and are market leaders in HIV anti-virals with 51.53%, gynaecology at 11.85%, and blood-related products with a market share of 10.26%. They are also leading the creation of India’s first indigenous mRNA vaccine for Covid -19. The company has orals, injectables, and biologics. Their products are available in 70 countries. The company has its headquarters in Pune. It is and the 12 largest pharmaceutical companies in India.
The company has shown growth in revenue and profits over the last three consecutive years. Revenue showed an 18.7% growth from FY20 to FY21 and profits grew by 314.3% in the same period.
The pharmaceutical sector in India is growing steadily and Emcure is in a very strong position with sound financials, research and development, robust sales, and a global foothold. The growing sector presents immense opportunities. But there are domestic and global pharmaceutical giants to compete with. Changing pharmaceutical and healthcare regulations and huge expenses incurred in R&D, technology adaptation, and innovations can be deterrents to growth.
The IPO size is about INR 4500 croresthrough fresh issue and a partial offer for sale by the promoters of the company, Mr. Satish Mehta and Mr. Sunil Mehta. Together the Mehta’s hold around 48% of the total shares. Other promoters hold 33.55% of the shares and Bain Capital, a private equity major, hold 13.09%. The company plans to utilize around INR 970 crores from the proceeds towards paying off debts.
Hexagon Nutrition: Hexagon Nutrition is a research-oriented fully integrated nutrition company with a broad spectrum of products across clinical nutrition products, micronutrient premixes, and therapeutic products. The company has manufacturing facilities located Nashik, Chennai, and Thoothukudi and research and development facilities at Nashik and Chennai. The company started in 1993 as a micro-nutrient formulator and has since grown to include branded clinical and wellness nutrition products in the retail segment, customized micronutrient formulations for major Indian brands like Amul, Coca Cola, Dabur, and Marico, and ready to use nutrient food for treating malnutrition in children and supplemental nutrition for pregnant and lactating women. The company is headquartered in Mumbai.
Hexagon nutrition is considered a pioneer in micronutrient premix formulation in South Asia with leading brands in wellness and clinical nutrition. They have longstanding clients who give repeat orders, strong R&D, manufacturing facilities and pan India distribution channels, and good growth and financials. There is however significant competition from global brands like Abbott Nutrition, Nestle Health Science, Baxter, Nutricia, etc, and Sun Pharmaceuticals and Hindustan Unilever. The company also relies heavily on premix formulations and significant revenue comes from few select customers.
The IPO is tentatively scheduled to open in April or May of 2022. The IPO size is INR 600 crores through fresh issue of INR 100 crores and an offer for sale of around three crore equity shares from the existing shareholders. The profit of the company has grown steadily over the past three consecutive years and the expenses are well contained.
Points of Note:
- We at Nuuu put our best efforts forward to help our investors make the right decision. But remember that no investment is 100% fail-proof. There are a lot of unforeseen and unpredictable external and internal factors that affect the share value of a company.
- There are lots of latest and upcoming IPOs in India. But which one should you invest in? That is where Nuuu comes in. We can answer all of your questions regarding IPOs and the companies, and help you choose ones that suits you the most in terms of your budget, risks you are willing to take, and your overall experience and understanding of IPOs and share trading.