NEW DELHI: It seems Diwali for IPO mart is coming a bit late as the coming week is going to be a heavy one for the primary market with three companies vying for investor attention for raising a whopping Rs 21,000 crore.
Paytm’s parent One 97 Communications will hit the market first, on Monday to raise Rs 18,300 crore. This will be the biggest issue in India ever. Along with this, the issues of Sapphire Foods and Latent View Analytics will open for subscription on Tuesday and Wednesday, respectively.
Besides, the issues that ended their bidding period last week will also start allocating shares and initiate refunds. Plus two more names may mark their market debut during the week.
Paytm
The IPO of one of the largest fintech firms in India has created a lot of buzz in the market. The issue comprises a fresh issue of Rs 8,300 crore and an offer for sale of Rs 10,000 crore. In the IPO, selling shareholders include founder Vijay Shekhar Sharma and investors Saif III Mauritius Company & SVF Panther (Cayman).
The massive interest in the IPO is evident from the huge interest it generated during the anchor round. The company has already mopped up Rs 8,235 crore from names like Singapore’s GIC, Canada’s CPPIB, BlackRock, Alkeon Capital, Abu Dhabi Investment Authority–there are 122 names that have picked up stakes in the fintech major. This also includes four domestic mutual funds — HDFC, Aditya Birla, Mirae Asset and BNP Paribas — that took nearly 13 per cent of total anchor allotments.
However, analysts are lukewarm on the counter. Initial reviews by analysts are not that encouraging as two out of three are suggesting an avoid, citing high valuations. However, they agree that their opinions will not stop the issue from sailing through.
ICICIdirect in a note said Paytm is a play on digitisation of various financial services including payments, investments & financial solutions. At the upper end of the price band, the company is valued at ~9.5x post issue Book value and at 24 per cent of annualised GMV. However, it did not give an opinion on whether investors should subscribe or not.
Sapphire Foods
Sapphire Foods, which operates the KFC and Pizza Hut chain of stores, is planning to raise Rs 2,073 crore through its public issue at the higher end of the price band of Rs 1,120-1,180 per share. The company will launch its IPO on November 9 and the issue will close on November 11.
“Considering the trailing twelve month (TTM) adjusted EBITDA on post issue basis, the company is going to list at a EV/EBITDA of 41.38 with a market cap of Rs 7498 crore while its peers namely Jubilant Foodworks and Westlife Development are trading at a EV/EBITDA of 49.26 and 73.55 respectively,” said analyst at Marwadi Shares and Finance.
“We assign ‘Subscribe’ rating to this IPO as the company is a leading QSR brand with a substantial market presence and has a scalable new restaurant economic model for expansion. Also, it is available at reasonable valuation as compared to its peers.”
Latent View Analytics
Data analytics services provider Latent View Analytics will be the third public offer to open for subscription this week . The Rs 600-crore public offer, which will open on November 10 and close on November 12, comprises a fresh issue of Rs 474 crore and an offer for sale of Rs 126 crore by promoter and other selling shareholders.
The company designs and engineers result-oriented analytics solutions for clients across industries. Their expertise in business analytics includes analytics with respect to customer profiling, targeted marketing, supply chain management, finance and risk management, and HR functions.
Listings
Besides these issues, Nykaa’s parent FSN E-Commerce Ventures and Fino Payments Bank are expected to hit the secondary market and make their debut on November 11 and November 12, respectively. FSN E-commerce successfully raised Rs 5,352 crore through its public issue while Fino Payments Bank mopped up Rs 1,200 crore via IPO during October 29-November 2.
