Tata Technologies IPO vs IREDA IPO vs Gandhar Oil Refinery IPO – Which IPO steals the spotlight?

Here are 3 IPOs that are open this week viz. Tata Technologies Ltd, Indian Renewable Energy Development Agency Ltd (IREDA) and Gandhar Oil Refinery Ltd. Which IPO should the investor put her money on? There are no simple answers but the best way would be a quick comparison of the three.

About Tata Technologies IPO

Tata Technologies empowers auto manufactures to design, engineer and validate products for a greener, safer, and more sustainable world. It offers software defined vehicle solutions (SDV), end to end EV engineering solutions, Turnkey full vehicle development, product benchmarking solutions, embedded engineering solutions, testing, model based engineering support and digital transformation systems.

Tata Technologies IPO is priced in the band of ₹475 to ₹500 per share. It is entirely an offer for sale (OFS) with no fresh issue fund raising. The OFS entails the sale of 6,08,50,278 shares (608.50 lakh shares), which at the upper price band of ₹500 per share will translate into an offer for sale (OFS) size of ₹3,042.51 crore. This will also be the total size of the IPO of Tata Technologies. Out of the OFS of 608.50 lakh shares, the promoter (Tata Motors Ltd) will sell 462.75 lakh shares while investor shareholders; Alpha TC Holdings will sell 97.17 lakh shares and Tata Capital Growth Fund 48.58 lakh shares. Total IPO size will be Rs3,042.51 crore.

The IPO of Tata Technologies opens for subscription on 22nd November 2023 and closes for subscription on 24th November 2023 (both days inclusive). The basis of allotment will be finalized on 30th November 2023 and the refunds will be initiated on 01st December 2023. In addition, the demat credits are expected to happen on 04th December 2023 and the stock will list on 05th December 2023 on the NSE and the BSE. Tata Technologies Ltd IPO will be special because it is the first IPO from the Tata group in the last 19 years. The last IPO was TCS in 2004. At Rs3,042.51 crore, this is a large IPO and will test investor appetite.

About IREDA IPO

IREDA is a financial institution giving loans for renewable energy projects in India. For FY22, it sanctioned loans of ₹23,921 crore and had disbursed loans of ₹16,071 crore. IREDA extends financial assistance for new and renewable energy projects, as well as energy efficiency and conservation projects. Apart from project finance, IREDA also brings its domain skills in the renewable energy field into play as a mentor and consultant advisor.

IREDA IPO will be a combination of fresh issue and an offer for sale. The IPO is priced in the band of ₹30 to ₹32 per share with the final price to be discovered post the IPO. The fresh issue is of 40,31,64,706 shares, which at the upper price band of ₹32 per share will translate into fresh issue size of ₹1,290.13 crore. The OFS by government of India is for 26,87,76,471 shares, which at ₹32 per share will mean an OFS size of ₹860.08 crore. Therefore, the overall IPO of IREDA will entail the issue and sale of 67,19,41,177 shares, which at the upper price band of ₹32 per share will mean total IPO size of ₹2,150.21 crore.

The IPO of IREDA opened for subscription on 21st November 2023 and closes for subscription on 23rd November 2023 (both days inclusive). The basis of allotment will be finalized on 29th November 2023 and the refunds will be initiated on 30th November 2023. In addition, the demat credits are expected to happen on 01st December 2023 and the stock will list on 04th December 2023 on the NSE and the BSE. The Indian Renewable Energy Development Agency Ltd (IREDA) will test the appetite for financial stocks in general and for PSU divestment in a financial institution after a long time.

About Gandhar Oil Refinery IPO

Gandhar Oil Refinery India Ltd is relatively smaller in size compared to the Tata Technologies IPO and the IREDA IPO. Gandhar Oil Refinery is well respected in the world of Speciality Oils. The company is a leading manufacturer of white oils, with a focus on the consumer and healthcare end-industries. Gandhar Oil Refinery India Ltd has a diversified B2B customer base of over 3,558 customers.

Gandhar Oil Refinery India IPO is priced in the band of ₹160 to ₹169 per share and the final price will be discovered within this band via book building. The IPO is a mix of fresh issue and offer for sale. The fresh issue of Gandhar Oil Refinery India Ltd IPO comprises of 1,78,69,822 shares, which at the upper price band of ₹169 per share translates into fresh issue size of ₹302 crore. The offer for sale (OFS) of Gandhar Oil Refinery India Ltd entails the sale of 1,17,56,910 shares by the promoter shareholders, which translate into an OFS size of ₹198.69 crore. Therefore, the total IPO of Gandhar Oil Refinery Ltd will entail the issue and sale of 2,96,26,732 shares, which at the upper price band of ₹169 per share will translate into total IPO issue size of ₹500.69 crore.

The issue of Gandhar Oil Refinery India Ltd opens for subscription on 22nd November 2023 and closes for subscription on 24th November 2023 (both days inclusive). The basis of allotment will be finalized on 30th November 2023 and the refunds will be initiated on 01st December 2023. In addition, the demat credits are expected to happen on 04th December 2023 and the stock will list on 05th December 2023 on the NSE and the BSE. Gandhar Oil Refinery India Ltd will test the appetite for mid-sized stocks in the IPO market, which have been the alpha drivers in the past.

Which IPO steals the spotlight?

How do you define, which IPO steals the spotlight out of this three? There are two parameters we can use; the market premium and the likely subscription levels. Here is a sneak peak at the three stocks.

Does Tata Technologies steal the spotlight?

Let us look at the grey market premium (GMP) as a credible indicator of public perception. As of 21st November 2023, the GMP stands at ₹350 per share. On an upper band price of ₹500 per share; this translates into indicative premium on listing at 70%, which is very attractive, since shows a listing price of ₹850 per share.

However, on the downside, the HNI / NII and the QIB portion are likely to see heavy subscription. Even the retail portion could see lot of interest due to robust brand name and pedigree in India. That means, chances of allotment in the IPO may be low.

Does IREDA steal the spotlight?

Let us look at the grey market premium (GMP) of IREDA as a credible indicator of public perception. As of 21st November 2023, the GMP stands at ₹6 per share. On an upper band price of ₹32 per share; this translates into indicative premium on listing at 18.75%, which is modest, since it shows a listing price of ₹38 per share.

However, on the positive side, the issue could offer a better chance of allotment being a PSU and due to the large number of shares outstanding. Even the retail portion could see lot of interest due to PSU backing, but chances of allotment in the IPO may be higher.

Does Gandhar Oil Refinery Ltd steal the spotlight?

Let us look at the grey market premium (GMP) as a credible indicator of public perception. As of 21st November 2023, the GMP stands at ₹69 per share. On an upper band price of ₹169 per share; this translates into indicative premium on listing at 40.83%, which is very attractive, since shows a listing price of ₹238 per share.

Since the three IPOs are at the same time, it may be a tough choice. However, investors should look to apply in all the three IPOs. Their chances of allotment in IREDA may be comparatively higher compared to the other two.