With Paytm’s largest board of directors for payments reportedly approving a stock sale plan north of Rs 22,000 crore, the IPO market has a big day ahead of it as over a dozen financial services firms, including fintechs, will clear over Rs 55,000 crore of tax from the market, say Investment bankers.
With more than a dozen actors from insurance, asset management, commercial banking, non-banking, microfinance, housing finance and payment banks already submitting draft documents for public offers to the Sebi Market Authority, the financial services sector will dominate major themes or IPOs in the following months.
Some of those who have already submitted the draft Red Hering Prospectus (DRHPs) to Sebi are Aadhar Housing Finance (Rs 7,500 crore), Policy Bazar (Rs 4,000 crore), Aptus Housing Finance (Rs 3,000 crore), Star Health Insurance (Rs 2,000 crore), Aditya Birla Sun Life AMC (Rs 1,500-2,000 crore), Arohan Financial Services (Rs 1,800 crore), Fusion Microfinance (Rs 1,700 crore), Fincare Small Finance Bank (Rs 1,330 crore), Tamilnad Mercantile Bank ( Rs 1,300 crore), Medi Assist (Rs 840 crore) and Jana Small Finance Bank (Rs 700 crore), among others.
And the board of directors of the largest payment bank, Paytm, has reportedly approved an IPO of over Rs 22,000 crore to collectively raise around 55,000 crore from the public.
If it does happen, the Paytm offering will be the largest public offering ever in the country, dwarfing the largest ever – the government’s Rs15,000 billion stock sale in national mining company Coal India in October 2010, say Investment bankers who don’t want to be listed.
Investment bankers and analysts see the IPO as a reflection of the ongoing bull run and therefore advise private investors to be careful when parking money in new companies.
VK Vijayakumar, chief investment strategist at Geojit Financial Services in Kochi, said that the performance of the IPO market usually has a strong correlation with the performance of the secondary market.
“When the stock market is bullish, it attracts large numbers of investors to IPOs. In particular, new investors attracted by high potential profits are attracted to new offers, and the IPO has always done well in market booms, ”Vijayakumar told PTI.
Rupen Rajguru, Head of Equity Investments and Strategy at the global asset management firm Julius Baer in Mumbai, agrees and urges private investors to study valuations very carefully before investing as the market is currently overheating.
“It is expected that the current upswing of the IPO market will continue in the next few quarters. IPOs actually play with the topic of the financialization of saving, which represents a major structural change in the country,” said Rajguru to PTI from Mumbai.
He said Julius Baer “is optimistic about India as it regards India as one of the preferred emerging economies after China” on a global scale.
Although Vijayakumar found that the current bull market provides a favorable environment for IPOs, Vijayakumar also cautioned retail investors to be cautious about applying for IPOs, as some of the most recent IPOs have been listed at a huge discount of 30-40 percent below the issue Price. Kalyan Jewelers and Suryoday Small Finance Bank are even now trading at a discount to the issue price, he said.
“Promoters and commercial bakers are responsible for pricing the topic appropriately in order to put something on the table for small investors. Aggressive prices will hurt everyone, ”warned Vijayakumar.
He pointed out that even good issues are influenced by an unfavorable market. With the markets now overvalued, there is a possibility of a sharp correction. In order to enforce IPOs even under difficult market conditions, the pricing has to be right, he said.
In addition to traditional financial service providers, several digital payment and fintech players are also planning to open up the IPO market.
Paytm’s leading digital payments board of directors has approved a proposal to raise over Rs.22,000 billion from its IPO, while online insurance platform Policy Bazar also has a $ 4,000 billion offer.
Two small financial banks – Jana SFB and Fincare SFB – have also submitted their paper drafts to the market regulator. While Fincare plans to dissolve Rs 1,330 crore through a public offer, Jana plans to raise around Rs 700 crore.
Aditya Birla Sun Life AMC, the largest non-bank sponsored AMC, plans to go public with an offer of Rs 1,500 billion to Rs 2,000 billion. With an AUM of Rs 2.7 lakh crore, this is among the top five asset managers and will be the fourth AMC to trade on the domestic exchanges.
In the insurance sector, there are two IPOs by Westbridge Capital and billionaire investor Rakesh Jhununwalla, backed by Star Health & Allied Insurance, and Bengaluru-based largest health insurance administrator, Medi Assist TPA.
Medi Assist filed IPOS papers last month to raise around Rs 840 crore and it will be the first IPOS by an insurance TPA (Third Party Administrator) as Star Health solidifies an issue of Rs 2,000 crore.
Blackstone-backed private equity firm Aadhar Housing Finance and Chennai-based Aptus Housing Finance also plan to raise Rs 7,500 billion and Rs 3,000 billion, respectively, through IPOs.
Microfinance players like Arohan Financial Services, Fusion Microfinance and the digital debt platform Northern Arc also want to enter the IPO market.
Old-generation private lender Tamilnad Mercantile Bank, based in southern Tamil Nadu, is also planning to issue Rs 1,000 billion before the end of the calendar year, according to sources.
(Only the headline and image of this report may have been revised by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)
source https://dailyhealthynews.ca/ipo-buzz-on-the-street-as-dozen-finserv-players-line-up-rs-55000-cr-issues/
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