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An Initial Public Offering is the first step of offering shares of a private company to the public. It is the first time a company lists itself in the primary stock market for public investors and shareholders to invest in their stocks.
This allows the company to raise capital from the public.
How does an IPO work
Before an IPO, companies are considered private. They usually begin small, with a few shareholders – mainly the founders, family, friends, venture capitalists, or angel investors.
As a company grows and realizes that it is now mature enough to enjoy public investments’ benefits and responsibilities, it begins to advertise about going public. Generally, but not mandatorily, this stage occurs when a company manages to value at or over $1 billion.
When a company goes public, the private share ownership is converted into public ownership.
There are 11 major upcoming IPOs this year in the month of March. Namely –
Barbecue Nation Hospitality:
The casual dining chain has gained much popularity over the years since its launch in 2006. It has received approval to raise around Rs. 1200 crores through an IPO.
Fresh issuance of shares sum to 275 crores and the offer for sale includes 98,22,947 equity shares.
More information on the same will be out shortly.
This precision engineering solutions company based out of Hyderabad will hit the stock market and list themselves with Rs. 600 crore IPO on 3rd March 2021. They have a nod from the market regulator SEBI for a public listing of the shares.
The three-day IPO price band, closing on 5th March, will be around Rs. 574-Rs. 575 per share. The issue size is said to be 1,03,72,419 shares, with a lot size of 26 and its multiples. This means that investors can bid a minimum of 26 equity shares to invest, and in its multiples thereof.
Aadhar Housing Finance:
Founded in 1990, Aadhar Housing Finance has finally decided to go public. It is backed by a private equity firm called Blackstone Group Inc. It owns a 98.27% stake in the company.
AHF has set an IPO of Rs. 7,300 crores, issuance comprising of Rs. 1,500 cores new shares. Shares worth up to Rs. 5,800 crores by BCP Topco VII Pte Ltd., managed by Blackstone, will also mark its place.
The face value of their shares is Rs. 10 per equity share, and any other information about the same is yet to be out.
Another company amongst the upcoming 11 who has received a nod from SEBI to continue with the listing, the home-grown, absolutely famous jeweler, has filed a prospectus of Rs. 1,750 crore IPO.
The Kerala Based company has an intention to raise Rs. 1,000 crores by the initial issuance of shares. Its promoter T.S. Kalyanaraman and Warburg Pincus, are selling stakes worth Rs. 250 crores and Rs. 500 crores respectively.
The exact date of stepping into the market, issue size, and price band of the shares are not yet out.
Easy Trip Planners:
The online travel agency was found in 2008, having offices across different cities, including Noida, Bengaluru, Mumbai, and Hyderabad. They filed draft papers with SEBI in December 2019, with Rs. 510 crores IPO.
The company’s founders have decided to sell shares amounting to rupees 255 crores through the offer-for-sale mechanism. It is said that the IPO will start on 8th March and end on 10th March. The market lot is 80 shares, making that the minimum quantity of purchase. The IPO price band is Rs. 1860Rs. 187 per equity share, with a face value of Rs. 2 per share.
Apeejay Surrendra Park Hotels:
The company has managed to get a go0ahead from the market regulator SEBI to list itself in the stock market. They have an estimated 1,000 crores IPO, with a new issue of up to Rs. 400 crores and offer for sale for the rest amount.
The company aims to use the net proceeds for repayment and/or prepayment of borrowings that were taken for general corporate purposes.
Information about the price band, IPO launch date, etc., is not out in public as of now.
Suryoday Small Finance Bank:
The small finance bank is not so small anymore, as they have received a green signal from the market regulator SEBI for their IPO. It comprises of fresh issuance of 1,15,95,000 equity shares and an offer for sale of about 84,66,796 equity scrips.
The face value is said to be Rs. 10, and further information is not yet known to the public.
Laxmi Organic Industries:
They are also one amongst the entire list to get a go-ahead from the regulatory body, SEBI. The specialty chemicals manufacturer is ready to launch Rs. 800 crore IPO in the month of March.
Fresh issuance of shares comprises of about Rs. 500 crores. The rest is going to be through an offer for sale by the promoter – Yellow Stone Trust.
They plan to utilize the net proceeds in setting up a manufacturing facility for fluoro specialty chemicals, working capital needs, purchasing plant and machinery, and upgrading the existing assets.
Their equity shares’ face value is Rs. 2 per share, other information of which is still unknown.
Also, having a green signal from SEBI, the Mumbai-based real estate firm is all set to float its IPO. Fresh issuance of shares worth Rs. 810 crores are going to go on sale, with a sale up of 18,59620 shares by the company promoters and existing shareholders.
The estimated IPO size is Rs. 1,000 crores. Any other information about the same is not disclosed yet.
The big auto component maker, which started as a small-scale industry in 1986, has grown to become a precision manufacturing leader in multiple areas.
They recently filed a draft for an IPO and have received approval for the launch. The IPO consists of a fresh issue of equity shares amounting to Rs. 150 crores, and the offer for sale has 45,21,450 shares by the promoter and existing shareholders.
Each share’s face value is Rs. 5, but the price band and launch date are not out yet.
ESAF Small Finance Bank:
The Kerala-based small finance bank is all ready to launch Rs. 976 crore IPO. The IPO includes fresh issues worth Rs. 800 crores, and the rest through and offer for sale (OFS).
They are a relatively new company, incorporated in 2016. But they have managed to grow enormously in the last 4 years and have over 400 branches currently, including more than 400 workers country-wide.
Additionally, information about its IPO, prices, launch date, etc., is not out yet but should be out in public in the next few days.
What’s the next step?
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After all those years of big giants and startups not going public, this year is turning out to be different.
About 10 companies have already stepped into the market with an IPO in 2021, whereas 15 companies launched their IPOs in the entire year of 2021.
The year is proving to be a good year for tech debuts, but that does not lessen other industries’ chances to come and flourish.
Companies from different industries are going public in order to raise capital for various purposes – some to return the borrowings, some to upgrade their technology, some to hire more technology, and some to expand ultimately.
Public valuations are outstripping private valuations, and future growth seems to have no boundaries!