Initial public offers or IPOs are causing quite a flutter in the Indian stock market recently. The list of latest IPOs are listed down this blog:
Nazara Tech IPO
The first of the biggies recently is the interesting Nazara Tech IPO which has been subscribed a whopping 36 times. The gaming company, backed by ace investor Rakesh Jhunjhunwala, witnessed its IPO (initial public offer) drawing 20 times higher bids on the third day of the bidding procedure.
The issue garnered bids for a whopping 10, 41, 78, 256 shares until 1.40 PM and this was 35.67 times the issue size initially of 29, 20, 997 shares. This caused a major stir in stock market trading since the IPO came with an OFS (offer for share) of a sizable 5.29 million shares that were sold between Rs. 1,100-1,101 for each equity share, representative of a 16.7% stake in the entity. Prior to the IPO, Rs. 261 crore in shares was allotted by the company at Rs. 1,101 per share to 43 key anchor investors.
Nazara is the sole Indian entity to possess rights over assets and IP throughout regional, grass-roots, global and national e-Sports. It has market-leading dominance in the Indian market covering e-Sports and sports simulation alike. The former division saw 60% of growth for FY20, posting growth of almost 9 times over the last three years as per reports. This IPO is a watershed moment for the Indian and global gaming industries which should grow rapidly at 30-40% in the entire 2020-2034 period. This is one of a kind in terms of an Indian stock listing and may ultimately see a considerable premium owing to higher growth expectations and lack of other opportunities in this space.
At the higher end of the price spectrum, the issue is expected to mop up a handsome Rs. 582.91 crore from retail investors. The gaming industry in India touched $1.5 billion by way of the size which is only 25% of the Bollywood film industry. Hence, there are immense future growth opportunities and scope, driven by skyrocketing internet usage and smartphone penetration.
Easy Trip Planners
Another interesting IPO came up through Easy Trip Planners. They debuted nicely on the stock market, earning a listing at Rs. 212.25 on the National Stock Exchange, indicating 13.5% as the premium over the initial issue price of Rs. 187. For the BSE (Bombay Stock Exchange), the listing was at Rs. 206.00, indicating a rise of 10.6%. Stock valuation stood at 58.7 times of FY20 earnings for the company and it was also 49 times of FY21 earnings on the annualized basis. The issue of Rs. 510 crore got sold between the 8th and 10th of March and drew investors in large numbers with 159.33 times bids. The travel company came second in a list ranking leading Indian travel agencies by way of booking volumes for the nine months concluding on 31st December 2020. It was the sole profitable travel agency in the country for FY18-20 by way of net profit margins.
Easy Trip Planners has 400+ domestic and global flights on its roster along with 11 lakh hotels throughout the country and even abroad. It has a registered customer base of 96 lakh people with a network encompassing almost 60,000 agents. Close to 90% of revenues are derived from air ticket sales while the remainder comes from hotel room bookings. It has tie-ups with 23 hotel aggregators and several domestic airline companies. They enable offering enticing travel deals while a convenience fee is not charged for bookings alongside.
Kalyan Jewellers also made quite a splash in the market, with its IPO getting subscribed by 2.64 times. What was also interesting from a stock trading perspective is the initial public offer saw 24.96 lakh shares drawing bids as compared to the original size of 9.46 crore sizes. The high-net-worth individual segment was subscribed by 1.93 times and retail investment bids were received 2.85 times. QIBs (Qualified Institutional Buyers) were a segment that was subscribed 2.79 times. The issue of Rs. 1175 crore was priced in the range between Rs. 86-87. At the highest value, the valuation of the stock is 63 times of the FY20 earnings as well. Market cap is expected at Rs. 8961 crore for Kalyan Jewellers post IPO. It had a fresh issue of Rs. 800 crore and the offer was up to Rs. 375 crore. Warburg Pincus Group is also selling off a part of the stake which is valued at Rs. 250 crore and promoters were offered the chance to sell shares up to Rs. 125 crore. Promoter shareholding will come down to 60.5% after the issue as compared to 68% previously. The company will be tapping these funds for covering working capital needs while also using them for general corporate needs.
Kalyan Jewellers is one of the biggest jewellery brands in India. It designs, produces and sells a large variety of gold and other jewellery items throughout 107 showrooms in 21 States and 30 showrooms situated in the Middle East. Kalyan Jewellers previously had revenues affected in FY19 by floods in Southern India while FY20 revenues took a hit owing to the coronavirus-induced lockdown. Warburg Pincus deployed roughly Rs. 1,700 crore through a couple of tranches in this company, paying Rs. 1,200 crore and Rs. 500 in 2014 and 2017 respectively. The overall stake picked up was 24% in this firm.