India: Several companies firm up IPO plans as stocks rally

The four-day, post-budget stocks rally that capped the best week in four years for India’s benchmark Sensex has lifted the mood in the initial public offering (IPO) market.

Several companies that had been waiting for the markets to improve are now preparing to launch their share sales. The companies that have firmed up their IPO plans include Healthcare Global Enterprises Ltd, GVR Infra Projects Ltd and Centre For Sight Ltd, according to several people aware of the developments, who requested anonymity.

An 11.4% decline in Sensex since the start of the year till the Union Budget on 29 February meant few firms braved the market with their IPO plans. Only three companies have raised Rs.1,285 crore through the IPO route so far this year.

The Sensex has surged 7% since the budget.

HCG is planning to be the first among the lot to test the IPO waters. The firm is looking to sell shares worth Rs.600-700 crore in the week beginning 14 March, said one the people cited above.

GVR Infra and Centre for Sight are also looking at launching their IPOs in March. “We are ready with everything and waiting for the right signals and right window of opportunity. We have conducted roadshows and met investors, and are in the process of setting the valuation,” said a second person, who is involved in one of the IPOs.

GVR Infra’s IPO will see the company seek Rs.400 crore from investors, while Centre For Sight is looking to raise around Rs.300 crore through its IPO.

“Most companies have been waiting for months for the market to improve. As things are looking better now, companies, which are holding approvals, would like to look at launching their IPOs,” said Prithvi Haldea, the founder chairman at Prime Database group, a primary market tracker.

Typically, firms do not launch their IPOs before the budget because of the uncertainty involved, Haldea said, adding that companies would look at taking advantage of this window of opportunity as the market sentiments are improving.

“We were not very comfortable with the markets in the last two months. But we are looking to launch a couple of deals in the near term. We do not want to do IPOs just for listing; it has to trade as high as possible; hence we weren’t comfortable launching the IPOs earlier in 2016 and near the budget,” said a third person, also involved in one of the IPOs.

Emails sent to HCG, GVR Infra and Centre For Sight on Friday remained unanswered.

Apart from these three firms, several other firms too are proceeding with their initial share sales. These companies are yet to firm up timelines for their launch, though they are trying to launch either in March or latest by April.

These include IT services firm L&T Infotech Ltd, dairy firm Parag Milk Foods Ltd, manufacturing company Maini Precision Products Ltd and e-commerce firm Infibeam Inc.

Emails sent to the companies seeking comment on their IPO plans remained unanswered.

Nearly 27 firms have received Sebi’s approval to launch an IPO but are yet to do so, according to data available on the regulator’s website. Collectively, these firms plan to raise almost $2 billion (about Rs.12,700 crore) through their share sales.

In 2015, 21 companies raised Rs.13,614 crore by selling shares to the public for the first time, according to data from Prime Database.

According to the draft IPO papers filed by HCG, the firm will utilize the funds to be raised through the issue for purchase of medical equipment; investment in IT software, services and hardware; and pre-payment of debt. The IPO will also see its private equity investors—India Build-Out Fund Lp, PremjiInvest and Temasek Holdings Pvt. Ltd pare their stakes.

The other two IPOs, GVR Infra and Centre For Sight, will also see investors reduce their shareholding.

IDFC Private Equity, which invested Rs.150 crore in GVR Infra in 2012 and holds a 21.4% stake in the company, will be paring its holding to 12.3%.

GVR Infra will also use the IPO proceeds to fund working capital requirements and to reduce the outstanding amount under short-term borrowings.

Venture capital firm Matrix Partners is looking to sell part of its stake in Centre For Sight Ltd, according to the share sale documents filed by the company.

Also read:

India: Ravi Jaipuria to take Varun Beverages public in $149m IPO

India: Cab aggregator Ola plans for IPO in bid to repeat Infy’s success

India: HPL Electric files draft papers for $65m IPO

This story was first published on Livemint

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.