Five new IPOs this week, Tata Technologies, IREDA oversubscribed

In a bustling week for the Indian stock market, five initial public offerings (IPOs) are set to launch for subscriptions, offering investors diverse opportunities across sectors. Tata Technologies, Fedbank Financial Services, Flair Writing Industries, and Gandhar Oil Refinery debuted on Dalal Street today, 22 November.

According to market experts, the primary market is anticipated to grow substantially, aiming to raise over Rs 7,300 crore with these IPOs. V Prashant Rao, director & head-ECM, investment banking at Anand Rathi Advisors, explained the surge saying, “There have been several draft papers filings which indicate companies are gearing up to launch their IPOs in the coming quarters. Many of them, including the ones that have received Sebi clearance, are planning to launch before the general elections and hence you are seeing a flurry of IPOs getting launched.”

Tata Technologies IPO: A historic move

The Tata Technologies IPO marks a significant milestone as the first by a Tata Group company in 20 years. TCS, a Tata Group entity, had last floated its IPO in 2004. The Tata Technologies IPO is an offer for sale featuring 6.08 crore equity shares. The subscription period runs from 22 November to 24 November, with a price band set at Rs 475-500 per share for its Rs 3,042 crore IPO.

The response from investors has been robust, with the offer oversubscribed 3.21 times. Investors showed strong interest by purchasing 14.43 crore equity shares, surpassing the initial offer size of 4.5 crore shares.

Breaking down the subscription data, retail investors demonstrated significant enthusiasm by bidding 2.83 times their allocated shares. High-net-worth individuals (HNIs) subscribed at an impressive rate of 5.15 times, while qualified institutional buyers (QIBs) bid 2.19 times, according to data available from the exchanges. Specifically, the reserved portion for employees of Tata Technologies saw a subscription of 0.59 times, reflecting moderate interest from this group.

On the other hand, Tata Motors shareholders exhibited substantial interest, oversubscribing their allocated portion by 4.47 times. To provide further context, Tata Technologies has set aside 20.28 lakh shares for its employees and 60.85 lakh shares for shareholders of Tata Motors, who are also the company's promoters. It's important to note that the figures mentioned do not include the reserved portion for employees and shareholders, representing the net issue of the IPO.

IREDA IPO: Green energy finance

The Indian Renewable Energy Development Agency (IREDA) is set to launch its IPO from 21 to 23 November. Specialising in promoting, developing, and extending financial assistance for new and renewable energy projects, IREDA has fixed the price band at Rs 30-32 per equity share. On 22 November, the IREDA IPO reported a subscription rate of 2.19 times. The total bids received amount to 103 crore shares, surpassing the initial offer size of 47.09 crore shares.

Analysing the subscription trends across different investor categories, non-institutional investors (NII) displayed the highest level of interest, oversubscribing their allotted shares by 3.23 times. Following closely, retail investors participated actively, bidding 2.22 times the shares reserved for them. In contrast, the qualified institutional buyers (QIBs) quota witnessed a subscription of 1.34 per cent. The employee portion also experienced a notable interest, with a subscription rate of 2.33 times.

Fedbank Financial Services, Flair Writing Industries, and Gandhar Oil Refinery

Federal Bank's Fedbank Financial Services IPO opens for subscription from 22 to 24 November, featuring a fresh issue of equity shares worth Rs 600 crore and an offer for sale of 3.51 crore shares worth Rs 492 crore. The price band is set at Rs 133-140 per share.

Flair Writing Industries Ltd, a leading pen manufacturer, opens its IPO for subscription on 22 November and closes on 24 November. With a price band of Rs 288-304 per share, the IPO aims to raise Rs 593 crore.

Gandhar Oil Refinery, known for manufacturing white oils focusing on consumer and healthcare end industries, has its IPO open for subscription from 22 November to 24 November. The price band is set at Rs 160-169 per share, comprising a fresh issue of equity shares worth Rs 302 crore and an offer to sell 1.17 crore shares by promoters and existing shareholders.

IPO trends and market overview

According to Motilal Oswal, the financial year 2022-23 has seen 34 mainboard IPOs raise roughly Rs 52,120 crore. Despite challenges such as rising inflation rates, interest hikes, and geopolitical tensions, the market has witnessed strong participation. Full subscription has been achieved for all completed IPOs in 2023, showcasing investor confidence.

The total number of IPOs in 2023 surpassed last year's tally in early November, reaching 42, with ASK Automotive set to become the 43rd IPO of the year. Comparing the IPO performance of 2022 and 2023, it's noteworthy that while 2022 had 40 companies raising just over Rs 36,000 crore, the IPO of Life Insurance Corporation of India (LIC) significantly skewed the numbers. LIC's IPO alone, at Rs 21,000 crore, made it the country's largest-ever IPO.