IPO rush continues; 10 cos line up public issues worth Rs 10,000 cr in Dec, BFSI News, ET BFSI

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New Delhi, Dec 1 : The IPO lane will continue to be busy in December as 10 companies have lined up initial share-sale plans worth more than Rs 10,000 crore, merchant banking sources said on Wednesday. Moreover, the initial public offerings of Star Health and Allied Insurance and Tega Industries are currently open for public subscription.

This comes after 10 firms successfully concluded their initial public offerings (IPOs) in November.

Among the companies that scheduled their IPOs in this month include RateGain Travel Technologies, travel and hospitality technology services provider, and Anand Rathi Wealth Ltd, part of Mumbai-based financial services group Anand Rathi.

RateGain’s Rs 1,335-crore initial share-sale will open for public subscription during December 7-9, and the Rs 660-crore IPO of Anand Rathi Wealth will open on December 2.

In addition, the companies that have firmed up their IPO plans are — Global Health Ltd, which operates and manages hospitals under the Medanta brand, pharmacy retail chain MedPlus Health Services and Healthium Medtech, merchant banking sources said.

Apart from these, Metro Brands, Shriram Properties, AGS Transact Technologies, Shri Bajrang Power and Ispat and VLCC Health Care may also float their public issues in the period under review, they added.

Investment bankers said these companies will raise more than Rs 10,000 crore collectively.

The companies are raising funds to support business expansion plans, to retire debt and for general corporate purposes.

Some of the IPOs are an offer for sale (OFS), where private equity players or the promoter wants to cash out part of their holding.

Prateek Singh, founder and CEO of LearnApp.com, attributed the impressive pipeline to the bull run in the equity markets.

“The best time for any company to go for an IPO is during the Bull market, which is also the reason why many companies are going for a public listing at this time. Companies look to tap into the sentiment from the public markets at such opportune times and are highly successful,” he said.

Further, initial share-sales are receiving tremendous applications from the investors and IPOs have been subscribing multifold times.This has pushed companies to raise funds through IPO.

He further said the trend will continue and more tech companies will try to go public in the immediate future until the market calms down and moves downward.

“So, if the markets fall in the future, the IPOs will also reduce,” he added.

So far in 2021, as many as 51 companies have launched their IPOs to raise over Rs 1 lakh crore, according to analysis of data with exchanges.

Apart from these, PowerGrid InvIT, the infrastructure investment trust (InvIT) sponsored by the Power Grid Corporation of India, mopped-up Rs 7,735 crore through its IPO and Brookfield India Real Estate Trust raised Rs 3,800 crore via its initial share-sale.

The fundraising so far this year is way higher than the Rs 26,611 crore collected by 15 companies through initial share-sales in the entire 2020.

Such impressive fundraising through IPOs was last seen in 2017 when firms mobilised Rs 67,147 crore through 36 initial share-sales.



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States debt-to-GDP ratio worryingly higher than FY23 target, says RBI report, BFSI News, ET BFSI

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Mumbai, The combined debt-to-GDP ratio of states is expected to remain at 31 per cent by end-March 2022 which is worryingly higher than the target of 20 per cent to be achieved by 2022-23, according to a RBI report. The Reserve Bank’s annual publication titled ‘State Finances: A Study of Budgets of 2021-22’ further said as the impact of the second COVID-19 wave wanes, state governments need to take credible steps to address debt sustainability concerns.

“The combined debt to GDP ratio of States which stood at 31 per cent at end-March 2021 and is expected to remain at that level by end-March 2022, is worryingly higher than the target of 20 per cent to be achieved by 2022-23, as per the recommendations of the FRBM Review Committee,” it said.

In view of the pandemic induced slowdown, in its projections, the 15th Finance Commission expects the debt-GDP ratio to peak at 33.3 per cent in 2022-23 (in view of the higher deficits in 2020-21, 2021-22 and 2022-23), and gradually decline thereafter to reach 32.5 per cent by 2025-26.

The RBI report noted that the budgeted consolidated gross fiscal deficit (GFD) of 3.7 per cent of GDP for states for the year 2021-22 – lower than the 4 per cent level as recommended by the FC-XV (15th Finance Commission)- reflect the state governments’ intent towards fiscal consolidation.

According to the report, in the medium term, improvements in the fiscal position of state governments will be contingent upon reforms in the power sector as recommended by FC-XV and specified by the Centre – creating transparent and hassle-free provision of power subsidy to farmers; preventing leakages; and improving the health of the power distribution companies (DISCOMs) by alleviating their liquidity stress in a sustainable manner.

“Timely payments of state dues to DISCOMS and, in turn, by them to Generation Companies (GENCOS) hold the key to the sector’s financial health,” it said.

The report said undertaking power sector reforms will not only facilitate additional borrowings of 0.25 per cent of GSDP (Gross State Domestic Product ) by the states but also reduce their contingent liabilities due to improvement in financial health of the DISCOMs.

It pointed out that in 2020-21, the first wave of the pandemic posed states the critical challenge of declining revenue and the need for higher spending.

To partially offset the revenue shortfall, the report said states hiked their duties on petrol, diesel and alcohol and focused on rationalising non-priority expenditures to make room for higher expenditure on healthcare and social services.

According to the report, the year 2021-22 started on a similar note, with the outbreak of the second wave.

“However, the impact of the second wave on state finances is likely to be less severe than the first wave due to less stringent and localised restrictions imposed this time as opposed to the nationwide lockdown during the first wave of COVID-19,” it observed.



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5 More IPOs Lined Up For December 2021 Launch

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1. Anand Rathi Wealth:

Offer period -Dec 2-Dec 6, 2021

Issue size- Rs. 660 crore

IPO price band- Rs. 530-550

The issue is completely an offer for sale (OFS) of 1.2 crore equity shares by promoters and existing shareholders. Listing of the scrip shall be on December 14, 2021.

Company profile: The company registered as a mutual fund distributor is in the business of private wealth since 2002. The company’s total AUM as on August 31, 2021 stands at Rs. 30,209 crore. The company serves its HNI and UHNIs from across 11 locations in the country.

Notably the grey market premium which has zoomed ahead of the opening of the issue signals a good interest for the IPO.

2. Rain Gain Travel Tech:

2. Rain Gain Travel Tech:

Offer period- December 7-9

Issue size: Rs. 1336 crore

Price band- Rs. 405-425

Minimum bid: 1 lot -35 equity shares entailing an investment of Rs. 14,875

The public issue comprises a fresh issuance of shares worth Rs 375 crore and an offer for sale (OFS) of up to 2,26,05,530 equity shares by promoters and an investor.

The fresh issue proceeds will be put towards repaying debts availed by subsidiary RateGain UK; payment of deferred consideration for taking over DHISCO; and strategic investments, acquisitions and inorganic growth. Addiionally the funds will be put for technology innovation, AI, other organic growth purposes, purchasing capital equipment for data centre and additional corporate purposes.

RateGain is a Software as a Service (SaaS) company in the hospitality and travel industry. The company caters to a wide array of verticals namely hotels, airlines, online travel agents, meta-search companies, vacation rentals, package providers, car rentals, rail, travel management companies, cruises and ferries.

The issue will list on December 17, 2021.

3. CE Infosystems:

3. CE Infosystems:

The company that operates MapmyIndia will open next week to mop up Rs. 1400 crore. The issue shall be a complete offer for sale of 7.55 million shares being offloaded by the company’s promoters as well as current shareholders that includes Qualcomm Asia Pacific.

The company provides its proprietary digital maps as SaaS. As per the company’s website the other offerings include geospatial software and location-based IOT technologies.

4. Adani Wilmar:

4. Adani Wilmar:

The issue as per reports is likely to open before mid-December. As part of the issue company will be issuing fresh shares worth Rs. 4500 crore. The proceeds from the issue will be put for financing capex, acquisitions, repayment of debt and other corporate purposes.

The company will be selling Rs 4,500 crore of newly-issued shares. From the proceeds, it plans to use Rs 1,900 crore for capital expenditure, Rs 500 crore for funding strategic acquisitions and the rest to repay debt and for general corporate purposes.

Adani Wilmar is among one of the few large FMCG companies offering most of the essential kitchen commodities for Indian consumers, including edible oil, wheat flour, rice, pulses and sugar.

5. Go First Airlines:

5. Go First Airlines:

Go Airlines (India) running the Go First brand will open its share sale on December 8 to aggregate Rs. 3600 crore.

Offer period -December 8- Dec 10

The issue is entirely fresh equity issuance and not an OFS. As of Fy 2020, the company had a debt of Rs. 1780 crore. The company from the proceeds will pare off its debt and also clear payments outstanding to oil companies and lessors. In the 1HFy22, period the company posted a net loss of Rs. 923 crore and is henceforth working to strengthen its cost saving measures and also planning its fleet to solely comprise A320 Neo aircraft and even considerng higher capacity Airbus A321 neo.

Experts suggested ways for successful allotment of shares in IPO

Experts suggested ways for successful allotment of shares in IPO

We have seen IPOs to fail in the past upon debut or even in the long term, but still in a case if you are too optimistic on an issue and surely desire it to be allotted to you in the initial share sale, you need to follow certain experts’ recommended rules listed as below:

You may apply for the IPO from the demat account of all the family members probably.

Do not make more than application in a single name

You may also place bid from an HUF/minor account

To avoid rejections due to technical reasons, one may apply for IPO via net banking and avoid UPI interface. However if applying via UPI, you should make sure that you approve UPI mandate timely.

Also, PAN details should match both in the demat and bank

Selection of a cut off is a must in case of retail application.

Demat should be in active mode.



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Bank unions threaten two-day nationwide strike against proposed privatisation of PSBs, BFSI News, ET BFSI

Banking & Finance

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The United Forum of Bank Unions (UFBU), an umbrella body of nine unions, has given a call for a two-day strike from December 16 to protest against the proposed privatisation of two state-owned lenders. In the Union Budget presented in February, Finance Minister Nirmala Sitharaman had announced the privatisation of two public sector banks (PSBs) as part of its disinvestment plan.

The government has already privatised IDBI Bank by selling its majority stake in the lender to LIC in 2019 and merged 14 public sector banks in the past four years.

The government has listed the Banking Laws (Amendment) Bill, 2021, for introduction and passage during the current session of Parliament.

In view of this, UFBU has decided to oppose the move for privatisation, All India Bank Employees Association (AIBEA) General Secretary C H Venkatachalam said in a statement.

Strike notice for December 16 and December 17, 2021, has been served by UFBU on the IBA, he said.

In a developing country like India, where banks deal with huge public savings and they have to play a leading role to ensure broad-based economic development, public sector banking with social orientation is the most appropriate and imperative need, he said.

Hence, he said, for the past 25 years, under the banner of UFBU “we have been opposing the policies of banking reforms which are aimed at weakening public sector banks”.

Members of UFBU include All India Bank Employees Association (AIBEA), All India Bank Officers’ Confederation (AIBOC), National Confederation of Bank Employees (NCBE), All India Bank Officers’ Association (AIBOA) and Bank Employees Confederation of India (BEFI).

Others are Indian National Bank Employees Federation (INBEF), Indian National Bank Officers Congress (INBOC), National Organisation of Bank Workers (NOBW) and National Organisation of Bank Officers (NOBO).



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States need to take credible steps to address debt sustainability concerns: RBI report

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As the impact of the second wave of the Covid pandemic wanes, the State governments need to take credible steps to address debt sustainability concerns, according to a Reserve Bank of India (RBI) report.

The report “State Finance: Study of Budgets” noted that the combined debt-to-GDP ratio of States, which stood at 31 per cent at end-March 2021, is expected to remain at that level by end-March 2022 and is worryingly higher than the target of 20 per cent to be achieved by 2022-23, as per the recommendations of the Fiscal Responsibility and Budget Management (FRBM) Review Committee, chaired by NK Singh.

In view of the pandemic-induced slowdown, the 15th Finance Commission expects the debt-GDP ratio to peak at 33.3 per cent in 2022-23 (given the higher deficits in 2020-21, 2021-22 and 2022-23), and gradually decline thereafter to reach 32.5 per cent by 2025-26.

The report observed that the budgeted gross fiscal deficit (GFD) of 3.7 per cent of GDP for States for the year 2021-22 – lower than the 4 per cent level as recommended by the 15th FC – reflects the State governments’ intent towards fiscal consolidation.

The report said in 2021-22 so far (April-September 2021), the gross and net market borrowings by State governments have been 13 per cent and 21 per cent lower than in the corresponding period of the previous year, respectively.

States have preferred to borrow from the financial accommodation provided by the RBI through short-term borrowing via the special drawing facility (SDF) and ways and means advances (WMA).

Additionally, in recent years, the States have been accumulating sizeable cash surpluses in the intermediate treasury bills (ITBs) and auction treasury bills (ATBs), although they involve a negative carry of interest rates for the States. The report underscored that this warrants improvements in cash management practices.

Power sector reforms

The report emphasised that in the medium term, improvements in the fiscal position of State governments will be contingent upon reforms in the power sector as recommended by the 15th FC and specified by the Centre – creating transparent and hassle-free provision of power subsidy to farmers, preventing leakages, and improving the health of the power distribution companies (DISCOMs) by sustainably alleviating their liquidity stress.

The report opined that timely payments of State dues to DISCOMS and, in turn, by them to generation companies (GENCOS) hold the key to the sector’s financial health.

As per the assessment of the RBI’s Department of Economic and Policy Research, undertaking power sector reforms will not only facilitate additional borrowings of 0.25 per cent of GSDP by the States but also reduce their contingent liabilities due to the improvement in the financial health of the DISCOMs.

Third-tier front

On the third-tier (urban local bodies) front, the report recommended increasing the functional autonomy of civic bodies, strengthening their governance structure and financially empowering them via higher resource availability through self-resource generation and transfers, as they are critical for building resilience and effective interventions at the grass-root level.

The State governments should set up State Finance Commissions (SFC) at regular intervals, in line with the recommendations of the 15th FC. The report said States may also urge rural and urban local bodies to make audited accounts available online in a timely manner to access grants.

In addition, States should undertake local body reforms as stipulated by the Centre to improve the financial autonomy of third-tier governments. “Overall, the sub-national fiscal positions are at an inflection point.Empowerment of the third-tier government presents an opportunity that can result in better and more effective pandemic crusaders in the future,” the report said.

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SBI Ecowrap: Private investment revival seems around the horizon

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New investment announcements in the current year look encouraging as around ₹8.6-lakh crore have been declared so far in the last seven months of FY22 (around ₹11 trillion reported last year).

With the private sector contributing around 67 per cent of this i.e., ₹5.80-lakh crore, it seems the private investment revival is on the horizon, said Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India (SBI), in the latest edition of SBI Ecowrap.

India’s GDP grew by 8.4 per cent in Q2 FY22 on the back of the double-digit growth in ‘mining & quarrying and public administration, defence and other services’. The real GVA increased by 8.5 per cent, a tad higher than the GDP growth.

Nominal GDP growth jumped by 17.5 per cent, driven in part by a GDP deflator at 8.4 per cent. For Q2, seasonally adjusted real GDP growth is 6.6 per cent q-o-q compared to 10.36 per cent q-o-q non-adjusted real GDP growth. Core GVA, a proxy of private sector growth, expanded by 7.5 per cent – the highest since Q1 FY19.

“In H1 FY21, the country exhibited real GDP loss of ₹11.4-lakh crore (on y-o-y basis) due to the complete lockdown in April-May and partial lockdown in June-September. The situation has improved in FY22 and in H1 FY22, the real gain was around ₹8.2-lakh crore. This indicates that the real loss of ₹3.2-lakh crore still needs to be recouped to reach the pre-pandemic level,” Ghosh said.

Affected sectors

Sector-wise data indicates that ‘trade, hotels, transport, communication & services related to broadcasting’ are still the most affected sectors and the real loss of ₹2.6-lakh crore is still needed to be recouped in this sector.

Overall, the economy is still operating at 95.6 per cent of the pre-pandemic level (with the above-mentioned affected sectors still at 80 per cent) and should take one more quarter to recoup the losses.

In Q2 FY22, the FMCG sector reported a top-line y-o-y growth of 11 per cent while EBIDTA and PAT grew by 4 per cent each. However, the rural markets, which have shown good resilience thus far during the pandemic have slowed in the last couple of months as suggested by some of the industry majors.

However, the results of industry majors whose Q2 FY22 results have been declared (like Dabur) have still not shown a significant slowdown in the rural economy.

“The Q2 estimate of the GDP on the expenditure side largely retains the flavour of trends observed in Q1 FY22. Foremost in quarterly trends, the shares in real terms have decreased for private consumption, government consumption and exports, and have increased for imports and investments and valuables. The component which has also increased is the inventories which have surpassed the pre-Covid level of FY20,” SBI Ecowrap said.

Thus, accounting for the growth in production and concomitant accumulation of inventory, the demand side has not recovered even after the opening of the economy. The massive jump in valuables which implies savings to the tune of 2 per cent of the GDP has moved into precious metals given their inflation hedging property and postponement of marriage in FY21, it added.

“We now expect the GDP growth for FY22 to top 9.5 per cent of the RBI forecast. We believe that the real GDP growth would now be higher than the RBI’s estimate of 9.5 per cent, assuming the RBI growth numbers for Q3 and Q4 to be sacrosanct,” Ghosh said.

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Digital payments remain strong, marginal decline in November

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Digital payments continued to maintain a strong momentum in November although the value and volume of transactions fell marginally compared to the record highs of October that was led by festive season spends.

The Unified Payments Interface, which crossed the 400 crore mark for the number of transactions in October, continued to remain well above the level.

However, the number of transactions on the UPI platform declined slightly to 418 crore in November 2021 compared to 421 crore transactions recorded in October, according to data from the National Payments Corporation of India.

The value of transactions processed through UPI last month was also buoyant but slightly lower at ₹7.68 lakh crore compared to ₹7.71 lakh crore in October.

Experts believe that UPI will continue to register robust growth and acceptance given the multiple use cases including the AutoPay feature and IPO subscription.

On a daily basis on an average, over 13 crore transactions worth at least ₹25,000 crore took place through UPI in November.

IMPS transactions

Transactions on the Immediate Payment Service (IMPS) platform also remained robust but saw a similar decline to 41.2 crore in November from 43.06 crore in October. The value of transactions processed through IMPS fell to ₹3.64 lakh crore in November from ₹3.7 lakh crore a year ago.

As many as 21.41 crore toll collection related transactions worth ₹3,177.17 crore took place through NETC FASTags in November compared to 21.42 crore payments amounting to ₹3,356.74 crore in October 2021.

Payments through AePS however, bucked the trend to rise marginally in terms of value in November 2021. As many as 9.46 crore transactions worth ₹25,687.66 crore took place through AePS last month compared to 9.68 crore transactions totalling ₹25,410.12 crore in October.

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Cryptocurrency exchange ZebPay appoints Tarun Jain as CFO, BFSI News, ET BFSI

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Crypto asset exchange company ZebPay has appointed Tarun Jain as its group chief financial officer (CFO). He will be responsible for shaping the strategic and long-term financial direction of the company.

Previously, Jain served as the CFO for Lithium Urban Technologies. He has also worked with companies like Zoomcar, Herman Miller, and Warner Bros. At ZebPay he is expected to work closely with the leadership team to drive the company’s financial and development strategy

Jain said in the company release, “I’m looking forward to supporting the development of ZebPay’s business and its suite of industry-first products for crypto investors in India. ZebPay is on a path to becoming the foremost crypto player in India and I’m glad to be leading the financial and strategic direction.”

Jain possesses expertise in financial management, investor relations, fundraising, strategic planning, commercial negotiation, and risk management. . Along with business planning, he will also be responsible for the company’s budgeting, forecasting, and leading strategic business negotiations.



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Fintech start-up Simpl raises $40 million Series B from Valar Ventures, IA Ventures

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Fintech start-up Simpl has raised $40 million Series B funding from Peter Thiel’s Valar Ventures and IA Ventures along with the participation of LFH Ventures and other investors.

CRED to acquire Happay for $180 million

With this round, the total capital raised by Simpl has reached $83 million. Simpl’s flagship product is a ‘buy now pay later’ offering called 1-tap Pay Later. Earlier this year Simpl released two new features — Billbox and Pay-in-3. Simpl’s Pay-in-3 feature allows customers to pay for their purchases over three equal payments every month. Further, Billbox feature ensures that all recurring utility bills like electricity, gas, water, broadband bill, etc, are paid automatically and the bill is added to the customer’s Simpl Bill which can be cleared at one go every 15 days.

Push to mobile payments

Over the past 18 months, Simpl claims to have grown its monthly active merchants and its monthly active users by 10X. Simpl works with over 7,000 online merchants including Zomato, MakeMyTrip, Big Basket, Jio Platform, 1MG and Crocs.

Data Focus: Fintech companies in payments space see a rush of investor-interest

“Online checkout is built on a fragmented payment value chain that was created 60 years ago and has left the native-to-mobile retailers and consumers underserved. We built a full-stack checkout platform that gives merchants ultimate control of user experience and helps them build trust with consumers at checkout. Simpl is like a Khata or a Tab for online commerce. This intuitive user experience, built on the bedrock of trust, will enable a larger e-commerce market and will lead to greater adoption of mobile payments in India and the rest of the world,” said Nitya Sharma CEO & Co-Founder of Simpl.

“Simpl built the first payments network we’ve seen that treats small and medium merchants as true partners. It offers the BNPL, fast checkout and anti-fraud features that merchants need to compete in today’s market, at a transparent, fair price,” said Jesse Beyroutey, Partner at IA Ventures.

E-commerce at inflection point

“India’s e-commerce market is at an inflection point and we believe Simpl’s solution is a key enabler in accelerating adoption of digital payments in e-commerce. It significantly improves consumer experience which is why it is quickly becoming a preferred partner for merchants. The team has shown great execution and we are excited to join their mission of democratising e-commerce for all merchants, big and small,” said James Fitzgerald, Partner at Valar Ventures.

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Deutsche Bank strengthens wealth management team in India, BFSI News, ET BFSI

Banking & Finance

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Deutsche Bank is strengthening its wealth management in India to take advantage of the increased entrepreneurial wealth in the country.

The German lender has hired more than 15 bankers and product professionals across various segments to join the India business in 2021 and early 2022. The additional hires are being made across the areas of relationship management and investment advisory.

“The business opportunity in India has become very compelling with the material wealth creation driven by entrepreneurial activity. We are now shifting gears and expanding our long-standing and established team as we seek to support our clients and reach new ones with our full suite of products and solutions” said Amrit Singh, head of wealth management, South Asia.

Among the new hires are Rajasekar Ayyalu who will take over as director in Chennai where he will be responsible for expanding and deepening Deutsche Bank’s presence in South India. Ayyalu was executive director (investments) at Julius Baer.

Four others, Jai Bhatia, Sanyam Sharma , Anjali Vashisth and Manish Lalwani have joined the bank’s Delhi and Mumbai offices as vice-presidents managing client relationships.

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