IT'S IPO SEASON AGAIN

INITIAL PUBLIC OFFERINGS

- M.G. Arun

A choppy stock market is sca­rcely the opportune time to raise money from the public, right? But when uncertainty is the reigning sentiment, what with the Russian­Ukraine war in its third month and the RBI (Reserve Bank of India) and US Federal Reserve hiking rates, what is the right time to enter the market? LIC (Life Insurance Corporation) set the ball rolling when it opened its much­awaited IPO (initial public offering) on May 4. Five other companies will follow suit this month, to raise Rs 7,960 crore through the same route. If media reports are to be believed, the overall funds raised from the new listings and the ongoing IPOs could touch Rs 28,960 crore this May, making it a rich summer for fund­rais­ ing after the cool pickings in November 2021, when nine companies raised Rs 35,664 crore via IPOs.

The Rs 5,235 crore IPO of Delhivery, a Gurgaon­based integrated logistics company, will comprise Rs 4,000 crore of fresh issue of shares, while the rest is an offer for sale (OFS). OFS is a mechanism that allows pro­moters to reduce their holdings in listed companies in a transparent manner. Unlike the money raised by offering fresh equity in an IPO, which a company uses as growth capital, money raised through OFS goes to the investor offering his equity for sale. Delhivery is targeting a $5 billion (Rs 38,660 crore) valuation when it makes its public market debut in a price band of Rs 462­487 per share. According to the company, it clocked revenues of Rs 5,170 crore in the first nine months of 2021­22. Other firms that have lined up IPOs in May include stainless steel products maker Venus Pipes and Tubes, premium watch retailer Ethos, health drink and food supplement maker Hexagon Nutrition, digital certificates firm eMudhra, and manufacturer of speciality chemicals and advanced intermediates Aether Industries.