Big Mainboard IPOs to watch out for in FY24

IPO action in FY23 was far from flattering, especially if we compare it to the IPO action in FY22. For instance, while FY22 saw more than Rs.120,000 crore collected through IPOs, the figure was down to just about Rs53,338 crore in FY23. Even the number of IPOs faltered with just about 37 IPOs hitting the IPO market in FY23 as compared to 53 IPOs in FY22. Unlike the FY22 period, when digital IPOs virtually ruled the market, these digital IPOs were almost invisible in the fiscal year FY23. That is largely due to the tepid performance of the digital IPOs post listing. In fact, FY23 IPO action was dominated by just two stocks with LIC of India and Delhivery jointly accounting for nearly 45% of all IPO collections in FY23.

IPO action in FY24 promises to be better

In comparison, the IPO action in FY24 promises to be a lot better. There are already IPOs worth Rs72,000 crore that are approved by SEBI and another Rs35,000 crore of IPOs that are filed but yet to be approved by SEBI. But the IPO story for FY24 can be best understood by looking at some interesting numbers.

Let us look at the IPO filings first and the status of approvals.

• There are at least 4 cases of IPOs where the DRHP has been filed more than 120 days back but SEBI approval is yet to be received.
   

• There are a total of 18 cases of IPOs where the DRHP (draft red herring prospectus) has been filed led than 120 days ago and the SEBI approval is still awaited.

Let us now turn to the cases of IPOs where SEBI approval has been received.

• There are 18 IPOs in total where the SEBI approval for the draft red herring prospectus (DRHP) filed has been received less than 4 months ago and the action point from the company is awaited.
   

• There are 9 companies where the IPOs have already been approved by SEBI more than 4 months ago but less than 7 months ago and action point from the company on the IPO plans is still awaited.
   

• There are a total of 33 companies where the SEBI approval for the DRHP filed has been received more than 7 months ago but less than 12 months ago. Here are the cases where the IPO action is urgent since the SEBI approval is valid for just 12 months.
   

• Finally, there are 18 companies where the SEBI approval has already been received more than 12 months ago and in such cases it is essential for the company in question to re-file with SEBI with current data and information pertaining to the company.

To sum up the story, there are a total of 100 companies or so that are intent to come out with an IPO but are either awaiting SEBI approval or are awaiting the right and opportune moment for the IPO. This list jointly constitutes the pipeline of IPOs for FY24.

Big IPOs expected to hit the market in FY24

With FY24 just about starting off, it is time to look at the big ticket IPOs on the anvil. Obviously, all these are big companies with a lot at stake so they would like to wait for an opportune moment and avoid too much of crowding. For now, only one mega IPO of Mankind Pharma has announced the data with the IPO opening on 21st April. However, this is likely to set the tone for a slew of IPOs in the fiscal year FY22. It is anticipated that even companies that had shelved IPO plans in FY23 are likely to come back to the IPO markets in FY24. Here is a quick list of IPOs expected to hit the IPO market in FY24 with basic details.

1. Mankind Pharma Ltd

Mankind Pharma is a company into a variety of pharmaceutical formulations across various chronic and therapeutic areas. Some of its brands like Manforce are extremely popular in India. The IPO opens on 21st April and closes on 25th April 2023. Being an offer for sale, there will be no fresh infusion of funds into the company.

The entire issue of 400.59 lakh shares by the company will be by way of offer for sale and there is no fresh issue component in the IPO. The company will list on 04th May on the BSE and on the NSE. For FY22, Mankind Pharma had reported net sales revenues of Rs7,978 crore and net profits of Rs1,453 crore.

2. Honasa Consumer Brand (Mamaearth)

Not too many details are available for the company, except that the company has been promoted by Ghazala Alagh and Varun Alagh. Mamaearth is into natural and toxin-free skin care and health products and is one of the unicorns, used to describe a start-up with more than $1 billion valuation.

The IPO of Mamaearth will be a combination of fresh issue and offer for sale. It will use the fresh issue proceeds to build brand awareness and visibility. Varun Alagh is a former FMCG veteran while Ghazala Alagh is best known for her participation as a Shark Tank judge.

3. Go Digit Insurance

Go Digit is a digital full-stack insurance company. It is a leading player in the space with ownership of approximately 82.9% of Gross Written Premiums (GWP) written by Indian digital insurance players. Go Digit is backed by Virat Kohli and Anuska Sharma and was promoted by Kamlesh Goyal, the former insurance veteran from Bajaj and Allianz AG.

The IPO of Go Digit Insurance will comprise of Rs1,250 crore of fresh issue and Rs2,250 crore of offer for sale, taking to the total issue size to Rs3,500 crore. The fresh issue proceeds will be used to buffer up the capital base of the company.

4. Tata Technologies Ltd

This will be an IPO from the Tata stable after a full 19 years (the last TCS IPO was in the year 2004). The company is currently operating as a subsidiary of Tata Motors and offers high end technology solutions. Tata Motors is expected to hive off 811.34 lakh shares in the IPO as part of the offer for sale (OFS).

The IPO will be a 100% offer for sale and there will be no fresh infusion of shares into the company. Tata Technologies is a leading player in the automotive ER&D services. Its client roster includes 35 original equipment manufacturers (OEMs) and 12 new energy players.

5. Penna Cement Ltd

The Rs1,550 crore IPO of Penna Cements will comprise of Rs1,300 crore by way of fresh issue of shares and Rs250 crore by way of offer for sale (OFS). It is a 25 year old company and is a leading player in the integrated cement space with strong presence in Southern India and Western India, apart from plants in Sri Lanka.

The proceeds of the fresh issue will be utilized for various capital expenditure programs and to upgrade manufacturing units. Part of the funds raised will also be used to repay or prepay loans to reduce leverage. Penna Cements has a total of 4 integrated cement plants and 2 grind units with annual production capacity of 10 million tonnes per annum (TPA).

6. Northern Arc Capital

Northern Arc Capital is a 34 year old NBFC focussing on the credit needs of underserved families and enterprises. The company provides microfinance, MSME funding, auto finance, consumer finance, and affordable housing loans. It also additionally handles syndication and structuring of loans as well as fund management, through its subsidiary.

Northern Arc IPO will be a mix of fresh issue and an offer for sale. The fresh funds will be used to boost the capital adequacy, which is the key to expanding its asset book. The fresh funds will also be used for brand enhancement. Early investors will also take an exit through the offer for sale component.

7. Northern Arc Capital

Northern Arc Capital is a 34 year old NBFC focussing on the credit needs of underserved families and enterprises. The company provides microfinance, MSME funding, auto finance, consumer finance, and affordable housing loans. It also additionally handles syndication and structuring of loans as well as fund management, through its subsidiary. The IPO entails a fresh issue of Rs300 crore and an OFS of 365.21 lakh shares in total.

Northern Arc IPO will be a mix of fresh issue and an offer for sale. The fresh funds will be used to boost the capital adequacy, which is the key to expanding its asset book. The fresh funds will also be used for brand enhancement. Early investors will also take an exit through the offer for sale component.

8. Navi Technologies Ltd

Navi technologies Ltd will look to raise Rs3,350 crore through the IPO. The entire IPO would be in the form of a fresh issue with no offer of sale (OFS) component. Navi Technologies provides financial products and services in India via a 100% digital platform. It has emerged as an end-to-end digital ecosystem covering lending, insurance, and asset management.

Navi Technologies will be using part of the proceeds from the IPO to invest in NGIL, one of the material subsidiaries of the company. This will enable NGIL to maintain its solvency level and also manage its future capital requirements. Part of the fresh issue proceeds will also be used to fund working capital expenses like rentals and administrative costs.

9. Biba Fashions Ltd

BIBA Fashions Ltd plans to come out with an IPO that comprises of a fresh issue of equity shares worth Rs90 Crores combined with an offer for sale of 270 lakh equity shares as OFS quota. Biba is a home-grown label in women's ethnic wear and is a market leader in the niche. It offers high-quality products across segments with a product mix of over 154 SKUs.

Biba operates through exclusive brand outlets (EBOs), large format stores (LFS) and multi-brand outlets (MBOs). It is also strong in the ecommerce channel with exposure via Nykaa, Flipkart etc. The fresh issue component will be utilized for clearing the debts of the company and also for brand building and other strategic growth initiatives of the company.

10. First Meridian Business Services

First Meridian is one of India’s fastest-growing staffing companies. The Rs800 crore IPO of First Meridian Business Services includes a fresh issue of shares of Rs50 crore and an offer for sale (OFS) by existing shareholders to the tune of Rs750 crore. The company is India’s third largest staffing company in terms of revenues.

First Meridian Business Services has 50 offices spread across 75 cities. It currently caters to over 1,200 clients, including Indian and global clients. The company will use the net proceeds from the fresh issue component of the IPO for repayment and prepayment of certain market borrowings to reduce leverage and improve solvency ratios.

11. PayMate India Ltd

PayMate is a leading B2B (business to business) payment service provider for small and medium enterprises (SMEs). As part of the proposed IPO, PayMate India plans to raise Rs1500 crore. This will comprise of a fresh issue of shares worth Rs1,125 crore and an offer for sale (OFS) of shares worth Rs375 crore.

PayMate provides its users an integrated platform for facilitating vendor payment, statutory and utility payments. It had a total of 49,953 customers using their payment platform, predominantly SMEs. The fresh issue proceeds will be used to strengthen the brand, growth the customer base and penetrate into global markets.

12. Sterlite Power Transmission Ltd

Sterlite Power Transmission (part of the Twin Star and Anil Agarwal group) plans a Rs1,250 crore IPO, which will be entirely by way of a fresh issue. The funds will be utilized to repay the loans of its subsidiary, Khargone Transmission Ltd. Sterlite Power Transmission is based in India and Brazil.

The company is a significant power transmission infrastructure developer and solutions provider in the private sector power transmission space. The company plans to utilise the proceeds from the Issue towards defraying part of the loans of its subsidiary and also for general corporate purposes.

13. Utkarsh Small Finance Bank (SFB)

The Rs1,350 crore IPO of Utkarsh Small Finance Bank will comprise of a fresh issue of Rs750 crore combined with an offer for sale (OFS) of around Rs600 crore. Utkarsh Small Finance Bank provides microfinance options to underserved or unserved segments and is geographically focussed in the states of Bihar and Uttar Pradesh.

Utkarsh SFB is among the leading Small Finance Banks in India and is spread across 18 states in India. Its focus is on affordable loans to the underserved segments. The funds will be partially used to restructure the stressed loans as per the extant norms. The funds will also be used to partially augment the bank’s Tier 1 capital base.

14. Protean eGov Technologies Ltd

Protean eGov Technologies is a leading provider of e-governance services and its IPO comprises entirely of an offer for sale (OFS) of 120 lakh shares to the public at a price that is yet to be decided. Protean is involved in developing and executing mission critical and population scale greenfield technology solutions of national importance. It also collaborates with the government on public digital infrastructure and citizen-centric solutions. The IPO is an offer for sale issue, so no fresh flows will come into the company.

15. Droom Technology Ltd

Droom is a data science and technology-driven internet marketplace for new and used automobiles. It currently enjoys 65% market share in terms of number of transactions online. It is an agnostic online market place that caters to the B2C and the B2B markets. It also provides add-on products like auto loans and insurance.

The issue size will be Rs3,600 crore and out of that it will use Rs400 crore to finance inorganic mergers and acquisitions, while another Rs1,150 crore will be utilized for expansion and brand building of its current business.

16. Oravel Stays Ltd (Oyo Rooms)

The original IPO size of Oravel Stays (Oyo Rooms) was Rs8,430 crore comprising of Rs7,000 crore of fresh issue and Rs1,430 crore of offer for sale. However, the company is now expected to tone down the valuation sought and also the size of the issue. Oyo Rooms is a digital hospitality player on the lines of Airbnb in the US.

Oyo rooms was founded by Ritesh Agarwal in 2011 and had been one of the early unicorns in India. It has already raised $4.1 billion via funding till date. The IPO fund will be used to prepay debt and for its organic and inorganic growth objectives.

17. Imagine Marketing Services (BOAT)

BOAT is a brand of electronics focused on audio-focused smart wearables and accessories. BOAT also designs and markets smartwatches, earphones, travel chargers, stereo headphones, home audio equipment, wireless speakers etc. Its original plan was to raise over Rs8,000 crore through the IPO, but that is likely to toned down with market conditions.

The proceeds of the IPO will be used by BOAT for expanding its presence in wide range of lifestyle categories and to continue to invest in expansion of the customer base and on brand building.

18. Bharat FIH Ltd

Bharat FIH is one of India’s largest companies focused on electronic manufacturing services (EMS) with a market share of 23% by revenues. Its primary focus is on manufacturing mobile phones. It directly caters to Original Equipment Manufacturers (OEMs). The company plans to raise Rs2,502 crore via new issue which will be used for upgradation and expansion of facilities and also for working capital needs.

19. Bajaj Energy Ltd

Bajaj Energy is one of the leading private sector thermal generation companies in the state of Uttar Pradesh. It has already set up thermal power generation capacity of 2430 MW. It plans to add more conventional energy capacity in the coming years. The company plans to raise close to Rs5,000 crore via the IPO which will also be used to defray its debt. The funding will go into Lalitpur Power Generation Corporation.

20. TVS Supply Chain Solutions Ltd

TVS Supply Chain Solutions IPO will comprise of a fresh issue of Rs2,000 crore and an offer for sale of 595 lakh equity shares. It is a leading supply chain solutions provider in India. It has the pedigree of managing large and complex supply chains across multiple industries in India. Some of its premium clients include M&M, Sony, Hyundai India, Lexmark etc; apart from its own group companies. IPO funds will be used to finance the purchase of minority stake in the company’s step-down subsidiary, Rico Logistics Limited, UK and for M&A.

21. Macleods Pharmaceuticals Ltd

In September 2022, Macleods Pharma had announced the deferment of its IPO plans due to unfavourable market conditions, but it is one of the companies expected to revive its IPO plans in FY24. It plans to raise Rs5,000 crore via the IPO. Macleods is into developing and manufacturing an extensive range of pharmaceutical products. Their portfolio comprises of therapeutics like anti-infectives, cardiovascular, dermatology, hormone treatment, etc. It has 65 WHO pre-qualified products in its portfolio.

Macleods is present in over 170 countries across the world and serves them through its 8 manufacturing units. The issue is purely an offer for sale (OFS), so the purpose is more to list the stock and build visibility for the company in the equity markets.