Tag: IPO

Tamilnad Mercantile Bank files papers with SEBI for IPO

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C The Tuticorin(TamilNadu)-based Tamilnad Mercantile Bank Ltd has filed a draft red herring prospectus with the Securities Exchange Board of India (Sebi) to raise funds through an initial public offering.

The proposed IPO will comprise a fresh issue of equity worth up to 15.84 million shares and an offer for sale (OFS) of up to 12,505 shares by its existing promoters and shareholders.

About 75 per cent of the net offer has been reserved for qualified institutional buyers (QIBs), 15 per cent is for allocation to non-institutional investors (NIIs), and the remaining 10 per cent will be available for retail investors.

Proceeds from the IPO will be used for augmenting the lender’s tier I capital base.

The company had said that it was planning to raise more than .₹1,000 crore with an IPO.

Axis Capital, Motilal Oswal Investment Advisors and SBI Capital Markets are the book running lead managers for the IPO. Link Intime India is the registrar for the issue.

For FY21, the bank’s net profit stood at ₹603 crore as compared to ₹408 crore in FY20. Its gross non-performing assets (NPAs) were at 3.44% against 3.62% a year ago. Net NPA stood at 1.98% versus 1.8% last year. Its CASA ratio increased to 28.52% from 25.85%.

Total advances stood at ₹31,541 crore in FY21 from ₹28,236 crore FY20. Total deposits stood at ₹40,970 crore (₹36,825 crore). Its total business was at ₹72,511 crore, up 11 per cent from ₹65,061 crore in FY20.

It had 4.18 million customers in Tamil Nadu, which accounted for about 85 per cent of its total customer base. The bank also has a presence in Gujarat, Maharashtra, Karnataka and Andhra Pradesh.

As of June 2021, TMB had 509 branches, of which 106 were in rural, 247 in semi-urban, 80 in urban and 76 in big cities.

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SoftBank-backed Snapdeal weighs $400 million IPO, BFSI News, ET BFSI

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Indian e-commerce retailer Snapdeal Pvt is considering an initial public offering that could raise about $400 million, joining a growing list of startups preparing to tap capital markets as the nation’s digital economy booms.

The company, which counts SoftBank Group Corp. among its investors, is speaking with advisers about a potential listing in Mumbai that could value it at as much as $2.5 billion, the people said. An IPO could take place as soon as next year, they said, asking not to be identified because the details aren’t public.

Discussions are still at an early stage, and the firm could decide not to proceed with the plan, the people said. Representatives for Snapdeal and SoftBank declined to comment.

Snapdeal, based in the New Delhi suburb of Gurgaon, was once one of the country’s top three e-commerce firms along with Flipkart Online Services Pvt. and the Indian unit of Amazon.com Inc. Founded in 2010, it offers more than 60 million products across 800 categories on its platform and delivers to more than 6,000 cities and towns across the country, according to its website.

Four years ago, Snapdeal walked away from a potential merger with Flipkart, which would have united the two local-e-commerce companies against Amazon. Since then, Flipkart sold a controlling stake to Walmart Inc. and is now progressing towards its own IPO.

The amount raised through IPOs in India so far in 2021 has already surpassed the total gathered in the last three years. The pipeline for the rest of the year includes payments service provider Paytm, online insurance platform Policybazaar and e-commerce beauty startup Nykaa.



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Ola picks banks for $1 billion IPO, may file papers in October, BFSI News, ET BFSI

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Ride-hailing startup Ola has selected banks including Citigroup Inc. and Kotak Mahindra Bank Ltd. to manage its Mumbai initial public offering that could raise about $1 billion, according to people familiar with the matter.

The company, backed by SoftBank Group Corp. and Tiger Global Management, has also picked Morgan Stanley for the listing, said the people, who asked not to be named as the information is private. The Bangalore-based startup could seek a valuation of more than $8 billion in the IPO and could lodge a filing as soon as October, one of the people said.

The 11-year-old Ola would be joining a strong pipeline of Indian startups that are ready to tap the IPO market in the coming months. Paytm, the country’s leader in digital payments, Flipkart, the Indian e-commerce giant controlled by Walmart Inc., and digital education startup Byju’s are also preparing for their first-time share sales, Bloomberg News has reported.

Details of Ola’s IPO including size and timeline could still change as deliberations are ongoing, the people said. More banks could be added later, they said. A representative for Citi declined to comment, while representatives for Kotak Mahindra, Morgan Stanley and Ola didn’t immediately respond to requests for comment.

Ola currently partners with about 1.5 million drivers across 250 cities in India, Australia, New Zealand and the U.K. The Uber Technologies Inc.’s rival in July raised $500 million from investors including Temasek Holdings Pte and an affiliate of Warburg Pincus.



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Goldman Sachs, J P Morgan Chase among 10 merchant bankers to manage LIC IPO, BFSI News, ET BFSI

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The government has shortlisted 10 merchant bankers, including Goldman Sachs Group Inc., J P Morgan Chase & Co, and ICICI Securities, to manage the mega initial public offering (IPO) of the country’s largest life insurer LIC. As many as 16 domestic and international firms had made presentations before the Department of Investment and Public Asset Management (DIPAM) on August 26 to act as book running lead managers (BRLMs) for the IPO — touted to be the biggest share sale in the country’s history.

“Goldman Sachs Group Inc, JPMorgan Chase & Co, ICICI Securities Ltd, Kotak Mahindra Capital Co, JM Financial Ltd, Citigroup Inc and Nomura Holdings Inc are among the 10 BRLMs that have been shortlisted,” an official said.

With the merchant bankers in place, once the embedded valuation of LIC is arrived at, the government will go ahead and file draft IPO papers with market regulator Sebi.

Actuarial firm Milliman Advisors LLP India is working out the embedded value of LIC, while Deloitte and SBI Caps have been appointed as pre-IPO transaction advisors.

The government aims to come out with the IPO and subsequent listing of Life Insurance Corporation (LIC) on the bourses in the January-March quarter of 2022.

The government is also mulling allowing foreign investors to pick up stakes in the country’s largest insurer LIC. As per Sebi rules, foreign portfolio investors (FPI) are permitted to buy shares in a public offer.

However, since the LIC Act has no provision for foreign investments, there is a need to align the proposed LIC IPO with Sebi norms regarding foreign investor participation.

The DIPAM on July 15 had invited applications for appointment of up to 10 merchant bankers for LIC IPO. The last date for bidding was August 5.

The Cabinet Committee on Economic Affairs last month cleared the initial public offering proposal of Life Insurance Corp of India.

The ministerial panel known as the Alternative Mechanism on strategic disinvestment will now decide on the quantum of stake to be divested by the government.

“The potential size of the IPO is expected to be far larger than any precedent in Indian markets,” the department had said.

The listing of LIC will be crucial for the government in meeting its disinvestment target of Rs 1.75 lakh crore for 2021-22 (April-March).

So far this fiscal, Rs 8,368 crore has been mopped up through minority stake sales in PSU and sale of SUUTI stake in Axis Bank.



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India considers allowing foreign direct investment in Life Insurance Corp

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India is considering allowing foreign direct investment in Life Insurance Corporation, according to a person familiar with the matter, which could enable a single overseas investor to buy a large stake in the firm that’s headed for a mega-IPO.

Any strategic investment would be subject to a cap, though it’s unclear at what level that would be set, the person said, asking not to be identified as the deliberations are private. Participants at a meeting earlier this month noted a 20 per cent FDI limit on State-run banks, the person said.

Allowing FDI in LIC would permit so-called strategic investors such as massive pension funds or insurance firms to participate in the initial public offering, which is slated to be India’s largest ever. The Reserve Bank of India defines FDI as purchase of a stake that’s 10% or larger by an individual or entity based abroad.

Bankers seeking to arrange LIC’s IPO are due to make presentations to the government Thursday. Prime Minister Narendra Modi’s administration — which owns 100 per cent of LIC — is looking at the sale to help narrow its budget gap to 6.8 per cent of gross domestic product in the year through March 2022.

The listing could value LIC at as much as $261 billion, based on its assets under management and using private sector insurers as a benchmark, analysts at Jefferies India wrote in a February note.

While FDI of as much as 74 per cent is permitted in most Indian insurers, the rules don’t apply to LIC because it is a special entity created by an act of parliament, the person said, adding that the discussions regarding FDI are at an early stage and no final decision has been reached yet. A spokesperson for the finance ministry couldn’t be immediately reached for comment.

BNP Paribas SA, Citigroup Inc. and Goldman Sachs Group are among seven foreign banks vying to manage the IPO. Nine Indian firms include HDFC Bank Ltd. and Axis Capital.

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IPO bandwagon getting bigger and bigger; Aug sees 23 filings so far, BFSI News, ET BFSI

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Mumbai, The raging IPO frenzy has set a record of sorts this month with the first 20 days of August witnessing as many as 23 filings seeking regulatory permission to launch primary share sales worth around Rs 40,000 crore while eight companies already raising over Rs 18,200 crore in the month. Several of these companies are from the startup space such as fintech, e-commerce, online travel and SaaS (software-as-a- service) segments.

So far this year, over 40 new listings have raked in around Rs 70,000 crore. The depth of investor interest, especially from the retail, is very visible with many IPOs being oversubscribed over 100 times and many brokerages say total number of issues may well top the 100-mark this year.

The IPO market is so hot that it has caught the attention of the monetary authority which in its latest bulletin says “year 2021 could well turn out to be the year of IPOs for the country”.

Some of the major filings among the total 23 in the month include the Delhi-based PB Fintech, the promoters of insurance distributor Policybazaar, that is seeking Sebi nod for a Rs 6,000-crore issue; and the Pune-based Emcure Pharma that is seeking to raise Rs 5,000 crore.

Besides, Adani Wilmar, the FMCG arm of the Adani Group, is seeking to mop up Rs 4,500 crore, and the Mumbai-based online fashion and apparel brand Nykaa, whose holding firm FSN E-Commerce, has filed for an Rs 4,000 crore issue.

The list also includes the Gurugram-headquartered Le Travenues Technology, the promoters of online travel booking firm Ixigo, which is looking to collect Rs 1,800 crore from an issue; and Rategain Travel Technologies, the first SaaS (software-as-a-service) company to go public in the country with a Rs 1,500 crore issue; and the Noida-based Rategain is the country’s largest SaaS firm in the hospitality and travel space.

Another main issue is from the Kolkata-based Tarsons Products that manufactures a range of quality lab-ware products. Tarsons has a diversified product portfolio with over 1,700 stock-keeping units across 300 products and operate five manufacturing facilities in Bengal.

Other mid-sized IPOs include the Kochi-based automobile retailer Popular Vehicles & Services which last week filed for a Rs 700-crore issue; beauty care & wellness firm VLCC; Sapphire Foods which operates all the Yum Brands outlets in the country like KFC, Pizza Hut and Taco Bell; Go Fashion India (Go Colors); Fusion Microfinance; and the payment solutions provider AGS Transact Technologies which filed a Rs 800-crore issue on Friday.

And the biggest day for the street was August 4, when four companies–Krsnaa Diagnostics (Rs 1,213 crore), Windlas Biotech (Rs 401 crore in fresh issue and the rest in OFS), Devyani International, which is the largest franchisee of Pizza Hut, KFC and Costa Coffee in the country (Rs 1,838-crore), and Exxaro Tiles that manufactures vitrified tiles (Rs 161-crore) — filed for IPOs.

The companies are buoyed by bumper listings of Clean Science & Technology, GR Infraprojects, Zomato (which was the biggest issue so far this year with Rs 9,300 crore issue) and Tatva Chintan Pharma Chem.

The AGS issue is purely an offer-for-sale of equity shares by promoter Ravi B Goyal and other selling shareholders. Goyal will sell shares worth up to Rs 792 crore through the OFS and other selling shareholders will offload shares worth Rs 8 crore.

Meanwhile, the first 15 days of August saw eight companies successfully completing IPOs and collecting over Rs 18,200 crore in proceeds.

Some of the marquee names that completed the share sale process are the Chennai-based specialty chemicals manufacturer Chemplast Sanmar which raised Rs 3,850 crore; contract development and manufacturing organization Windlas Biotech (Rs 401 crore); home financier Aptus Value Housing (Rs 2,780 crore), the online auto retailing platform Cartrade Tech (Rs 3,000 crore), and drug firm Krsnaa Diagnostics (Rs 1,213 crore), also completed share sale.

Despite an over 20.3 times oversubscription to the Rs 3,000-crore Cartrade issue, the stock made a tepid debut on the Street on Friday and tumbled nearly 8 per cent at close even it opened lower at Rs 1,600, as against the issue price of Rs 1,618.

Besides, Nuvoco Vista Corporation, which has completed the IPO and is set for listing next Monday, is part of the Nirma Group and is among the largest cement and concrete manufacturers, offering a range of products like cement, ready-mix concrete, building materials like adhesives, wall putty, dry plaster, cover blocks, among other.



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AGS Transact Technologies plans IPO of up to ₹800 crore through OFS

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AGS Transact Technologies Ltd (AGSTTL) is planning an initial public offer (IPO) of up to ₹800 crore through an offer for sale (OFS) by the selling shareholders.

The OFS will be made by the promoter selling shareholder — Ravi B Goyal — aggregating up to ₹792 crore and other selling shareholders — VC Gupte, Shailesh Shetty, Rakesh Kumar, Nikhil Patiyat and Rajesh Harshedrai Shah — aggregating up to ₹8 crore.

The selling shareholders collectively hold 55.33 per cent of the pre-offer share capital of the company.

As per AGSTTL’s draft red herring prospectus, the objects of the offer are to carry out OFS by the selling shareholders and to realise the benefits of listing of the equity shares on the stock exchanges, enhancement of the company’s brand name and creation of a public market for the equity shares in India.

Currently, promoters — Ravi B Goyal (55.20 per cent stake) and Vineha Enterprises Private Ltd/VEPL (42.21 per cent) — collectively hold 97.61 per cent stake in AGSTTL. The promoter group holds 98.23 per cent stake.

AGSTTL is an omni-channel payment solutions provider, which provides digital and cash-based solutions to banks and corporate clients.

The company provides customised products and services comprising ATM and CRM outsourcing, cash management and digital payment solutions including merchant solutions, transaction processing services and mobile wallets.

For FY21, AGSTTL’s revenue from operations was at ₹1,759 crore (₹1,800 crore for FY20) and net profit was ₹55 crore ( ₹83 crore).

Pursuant to a Share Subscription Agreement (SSA) dated April 1, 2021 entered into between VEPL and AGSTTL, the latter subscribed to 65 crore compulsorily convertible preference shares (CCPS) of VEPL of face value ₹10 each.

Pursuant to a share purchase agreement dated August 16, 2021 entered into between Ravi B. Goyal and AGSTTL, Goyal has agreed to purchase and AGSTTL has agreed to sell the VEPL CCPS on terms set out in such agreement, as per the DRHP.

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RBI lauds Paytm IPO, says 2021 may turn out to be India’s year of IPO, BFSI News, ET BFSI

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The $ 2.2 billion proposed listing by a payment and financial services app symbolises investor excitement surrounding India’s digitalisation – digital payment solutions; e-commerce; logistics, says an RBI article.

The year 2021 could turn out to be India’s year of IPO with the domestic unicorns through their public issues setting “domestic stock markets on fire and global investors in a frenzy”, an RBI article said on Tuesday.

The successful Initial Public Offerings (IPOs) by new age companies in the recent months are a reflection of bullishness about Indian technology, it said.

“…growth impulse is igniting financial markets. 2021 could well turn out to be India’s year of the IPO. Debut offerings by Indian unicorns – unlisted start-ups – kicked off by a food delivery app’s stellar IPO that was oversubscribed 38 times, have set domestic stock markets on fire and global investors in a frenzy,” the central bank said in an article on the ‘State of Economy’.

The article has been authored by a team lead by RBI Deputy Governor Michael Debabrata Patra. The central bank said views expressed in the article are those of the authors and do not necessarily represent the views of the Reserve Bank.

The RBI article was referring to the IPO of Zomato which got oversubscribed 38 times.

Paytm IPO

The article further said that “the $ 2.2 billion proposed listing by a payment and financial services app symbolises investor excitement surrounding India’s digitalisation – digital payment solutions; e-commerce; logistics”.

Noting that the IPO of a specialty chemical manufacturing exporter was subscribed 180 times, the RBI said “these IPOs of new age companies arrive as bullishness about India mounts, especially around Indian tech”.

India’s tech boom, it added, has been long awaited, with strong global and domestic appetite for what are widely believed to be world class businesses in the pipeline, notwithstanding initial losses that have largely stemmed from the deep discount business models adopted by them.

These listings coincide with a broader rush by Indian companies to tap the market and the fomo (fear of missing out) factor driving investors, which have taken the benchmark indices to records, the RBI article said.

“A new era has clearly begun. It is estimated that India has 100 unicorns (Credit Suisse, 2021), with 10 new ones created in 2019, 13 in 2020 in spite of the pandemic and 3 a month in 2021 so far. They do not rely on inherited wealth or dependence on bank loans or extra-business connections, but on talent and innovative ideas. These are the children of liberalisation, not of the wealthy,” it said.

Maharaja Mac

Referring to the recent update by the UK-based The Economist of its Big Mac Index, an informal guide to currency valuation, the RBI article said that in terms of Maharaja Mac, India is currently the fourth-largest economy in the world.

“…we decided to give the Big Mac’s currency valuation powers a go by and turned it on its head. Looking at affordability or how many burgers can a currency buy relative to the US dollar, we measure how much a country’s GDP is valued in purchasing power terms,” the article said.

“Voila! The results uphold conventional wisdom – in terms of the Maharaja Mac, India is currently the fourth-largest economy in the world after China, the US and Japan.”



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MobiKwik ropes in four independent directors

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IPO-bound digital payments firm MobiKwik on Friday said it has strengthened its Board of Directors with the induction of four independent directors.

The four independent directors are former MD of Blackstone and Oppenheimer Punita Kumar Sinha, the former Ambassador of India to Egypt and UAE Navdeep Singh Suri, fintech entrepreneur and Co-founder of PaySense Sayali Karanjkar and Chief Technology Officer of LinkedIn Raghu Ram Hiremagalur .

Bipin Preet Singh, MD, CEO & Co-founder, MobiKwik said in a statement, “I see this as being foundational as we head into our next phase as a publicly listed company. The holistic expertise of our new Board members in our sector, public policy, technology and business will provide an added thrust to MobiKwik’s strategic direction.”

IPO

It maybe recalled that MobiKwik had on July 12 filed its draft red herring prospectus (DRHP) with SEBI for an IPO to raise ₹1,900 crore.

The IPO comprises fresh issue of equity shares of upto ₹1,500 crore and an offer for sale of equity shares by certain shareholders of upto ₹400 crore.

Founded in 2009 by Bipin Preet Singh and Upasana Rupkrishan Taku, MobiKwik is one of India’s leading mobile wallet and Buy Now Pay Later platform.

It was last valued at $700 million when it raised $20 million recently from Abu Dhabi Investment Authority.

The company is profitable at the segment level across all three segments, and has seen a revenue growth (CAGR) of 37 per cent in the last two years (FY19-21).

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IPO-bound Paytm seeks shareholders’ nod to double ESOP pool, BFSI News, ET BFSI

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Fintech startup Paytm is planning to more than double its employee stock ownership plan (ESOP) pool, as per a letter sent to its shareholders for an extraordinary general meeting (EGM) scheduled for September 2, ahead of its much-anticipated IPO.

The Noida-based firm has proposed to its shareholders an increase in the existing ESOP pool to 61,094,280 equity options at a face value of Re 1 each from the current 24,094,280 equity options. The fintech company has also sought approval of founder and chief executive Vijay Shekhar Sharma’s revised employment agreement as the managing director and chief executive of the company.

Additionally, the company is formalising three appointments to the board of directors. These are Neeraj Arora, former chief business officer of WhatsApp and Ashit Ranjit Lilani, managing partner of Saama Capital, as non-executive independent directors; and Douglas Feagin, senior vice president, Ant Group, as a director.

The company has also put forth revised annual remuneration agreements for independent directors on the board for shareholders’ consideration. These include those of Mark Schwartz and Pallavi Shardul Shroff for Rs 1.85 crore and Ashit Ranjit Lilani and Neeraj Arora for Rs 1.48 crore.

ET has reviewed a copy of the letter.

In its previous EGM on July 12, the firm had passed several resolutions, including an IPO raise, and one declassifying Sharma as the promoter to list as a professionally managed company. Listing as a professionally run business could help smoothen Paytm’s IPO process as it reduces the compliance burden from investors and individuals that are considered promoters.

Also Read: Paytm founder to have protective rights after listing

Paytm’s ESOP expansion comes at a time when several leading tech and internet startups have offered lucrative buyback windows to help employees vest their options. In 2021, startups such as Zerodha, Razorpay, Cred, Acko, Udaan have given their employees windows to cash their stock options as valuations of India’s internet startups continue to rise rapidly.

ESOPs are an employee benefit plan that gives the firm’s employees ownership in the company in the first of stock options. Among growth-stage startups, ESOP plans are seen as an effective way to attract, retain and reward workers in a highly competitive talent market.

Paytm in July had filed a draft red herring prospectus with the markets regulator, the Securities and Exchange Board of India (Sebi), to raise Rs 16,600 crore ($2.2 billion) through a public issue in what will be one of the biggest Indian IPOs in at least a decade.

Also Read: Paytm and the art of going public

The stock offering will comprise a fresh issue worth Rs 8,300 crore ($1.1 billion) and a secondary issue or an offer for sale (OFS) of the same size, Paytm has told Sebi. The company may also consider a pre-IPO funding round of up to Rs 2,000 crore. If that happens the size of the fresh issue will be adjusted accordingly, the DRHP says.



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