Successful Mainboard IPO Listings of August 2024

August 2024 witnessed three significant IPO listings on mainboard: 

1- Ola Electric Mobility Ltd., 

2- Akums Drugs & Pharmaceuticals Ltd., &

3- Orient Technologies Ltd. 

Each of these IPOs garnered substantial attention from investors, reflecting robust interest in Indian equity markets. This report provides comparative analysis of their businesses, financial performance, valuation, business outlook, & listing performance.

Comparative Business Overview

1. Ola Electric Mobility Ltd.: Ola Electric is pure-play electric vehicle (EV) company in India with integrated technology & manufacturing capabilities for EVs & their components. Company has introduced seven products & announced four new ones, positioning itself as key player in India's burgeoning EV market. Ola Electric's vision to become global EV leader is underpinned by significant investments in research & development (R&D) & manufacturing.

2. Akums Drugs & Pharmaceuticals Ltd.: Akums is India's largest Contract Development & Manufacturing Organization (CDMO), serving pharmaceutical industry. Company offers comprehensive range of pharmaceutical products & services, both domestically & internationally. Akums' extensive manufacturing capabilities & strategic presence across pharmaceutical value chain provide solid foundation for sustained growth.

3. Orient Technologies Ltd.: Orient Technologies operates in IT solutions sector, offering data centre solutions, servers, storage, networking components, collaboration solutions, & security solutions. company also provides end-user computing & cloud & data management services. Orient Technologies' diverse product offerings & services make it key player in IT infrastructure & services space.

Financial Overview 

1. Ola Electric Mobility Ltd.: For FY 2024, Ola Electric reported loss of ₹1,584 crore, up from ₹1,472 crore in FY 2023. Despite these losses, company raised ₹6,146 crore from its IPO, with plans to invest ₹1,600 crore in R&D. Financial challenges include high competition, pricing pressures, & negative cash flows, which are critical concerns for investors.

2. Akums Drugs & Pharmaceuticals Ltd.: Akums reported steady top-line growth, but profitability remains challenge due to non-operational factors. Company’s debt stood at ₹440 crore pre-IPO, with plans to reduce it significantly post-IPO. Funds raised will also support working capital requirements & potential acquisitions, aiding its long-term growth.

3. Orient Technologies Ltd.: Orient Technologies showed consistent revenue growth, with FY 2024 revenue at ₹603 crores, up from ₹535 crore in FY 2023. Company maintained stable profit margins between 9% & 10% over past three years. Funds raised from IPO will primarily be used for capex & acquiring office premise in Navi Mumbai.

Valuation Overview

1. Ola Electric Mobility Ltd.: valuation of Ola Electric was challenging due to its consistent losses & negative cash flows. However, Company's long-term vision & R&D investments offer potential upside, making it high-risk, high-reward opportunity for investors.

2. Akums Drugs & Pharmaceuticals Ltd.: Akums was valued at reasonable multiples given its market leadership & extensive client base. Company's valuation was supported by its comprehensive product offerings & strong market position as India's largest CDMO.

3. Orient Technologies Ltd.: Orient Technologies was valued favourably, with its IPO priced between ₹195-206 per share. Company's robust financial performance & strategic initiatives in IT sector supported its valuation, making it attractive investment for participants.

Business Outlook 

1. Ola Electric Mobility Ltd.: Despite its financial challenges, Ola Electric's long-term story remains intact. company’s investments in R&D & new product launches position it well to capitalize on growing demand for EVs in India. However, short-term outlook may see volatility due to competitive pressures & operational challenges.

2. Akums Drugs & Pharmaceuticals Ltd.: Akums’ established market position & comprehensive product portfolio provide strong foundation for future growth. Company’s focus on reducing debt & enhancing profitability is expected to drive its long-term success in pharmaceutical sector.

3. Orient Technologies Ltd.: Orient Technologies is poised for growth, driven by increasing demand for IT infrastructure & services. Company’s strategic investments in capex & expansion plans are likely to enhance its market presence & profitability in coming years.

Listing Performance

1. Ola Electric Mobility Ltd.: Ola Electric’s shares made quiet debut, listing at par with IPO price of ₹76 on NSE & ₹75.99 on BSE. Despite subdued start, stock hit 20% upper circuit on day of listing, indicating strong investor interest post-listing.

2. Akums Drugs & Pharmaceuticals Ltd.: Akums Drugs had decent debut, listing at 7% premium over its issue price of ₹725. listing was in line with grey market premium & reflected investor confidence in company’s long-term prospects.

3. Orient Technologies Ltd.: Orient Technologies made strongest debut of three, listing at 41% premium over its issue price of ₹260. Robust listing was fuelled by strong investor demand & favourable valuations.

Subscription & Listing Comparison

Out of three IPOs, Orient Technologies received highest subscription, with IPO being oversubscribed 151.71 times. Strong investor response translated into 41% premium on listing, making it best-performing IPO of month in terms of both subscription & listing gains. Akums Drugs followed with subscription of 64.4 times & listing premium of 7%, while Ola Electric had more muted subscription but still managed to hit upper circuit post-listing.

Conclusion

August 2024 proved to be successful month for mainboard IPOs, with Orient Technologies leading in both subscription & listing performance, while Akums Drugs & Ola Electric demonstrated potential for long-term growth in their respective industries.