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IPO market picks up: Two in one week and more in the pipeline

IPO market picks up: Two in one week and more in the pipeline

By Ankit Gohel  Sept 7, 2020 6:51 PM IST (Updated)

After witnessing a lackluster year so far amid the COVID-19 pandemic, the Initial Public Offer (IPO) market is likely to pick up again with two IPOs hitting the street this week itself. The IPO of Happiest Minds Technologies, an IT services firm promoted by the founder of Mindtree, went live on exchanges on Monday and sailed through on the day 1 of subscription helped by strong demand for retail investors.

After witnessing a lackluster year so far amid the COVID-19 pandemic, the Initial Public Offer (IPO) market is likely to pick up again with two IPOs hitting the street this week itself.

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The IPO of Happiest Minds Technologies, an IT services firm promoted by the founder of Mindtree, went live on exchanges on Monday and sailed through on the day 1 of subscription helped by strong demand for retail investors.
The Rs 702 crore public issue of the Bengaluru-based firm has seen a 2.86 times subscription so far. It has received bids for 6.67 crore equity shares against the IPO size of over 2.32 crore shares (excluding anchor book), according to the data available on the exchanges.
The reserved portion for retail investors was subscribed 14.6 times and that of non-institutional investors by 61.3 percent. The reserved portion for qualified institutional investors was subscribed 8 percent subscription.
The company already raised Rs 316 crore through anchor investors' book on September.
The IPO, opened today with a price band at Rs 165-166 per share, will close on closes on September 9 and the shares will be listed on September 17.
"Over the years, the company has developed long-standing relationships with customers. The company gives significant attention to being able to understand the behavior, preferences, and trends of customers through research and a consultation process. It believe that this gives a distinct perspective that it brings to engagements. With this approach, it aims to become a key part of the customer’s operating and growth strategy, enabling HMT to serve customers across multiple touchpoints and projects," ICICI Direct said.
The second IPO lined up this week is of Route Mobile, a cloud communications service provider. The 600 crore IPO will be open for public subscription on September 9.
The company has fixed price band of Rs 345-350 a share. The public offer comprises a fresh issue worth Rs 240 crore and an offer for sale (OFS) of Rs 360 crore by promoters -- Y Sandipkumar Gupta and Rajdipkumar Gupta.
The initial public offer (IPO) will conclude on September 11 and the investment by anchor investors will be finalised by September 8. The company has reserved the usual 35 percent quote for retail investors.
Funds of the issue will be utilised by the Company for repayment of borrowings, acquisitions, purchase of office premises and general corporate purposes.
“There are no listed peers for the company in India. In the last 2 financial years revenue and PAT CAGR is 37.6% and 21.7% respectively. Company's 20% revenue comes from the domestic market and the remaining 80% from the international market. Operating profit has declined from 15% in FY18 to 10.4% in FY20 due to decline in gross margins from 32.5% to 20.1% from FY18 to FY20,” said Keshav Lahoti, Associate Equity Analyst, Angel Broking Ltd.
Going ahead this month, the market may see more IPOs.
UTI’s Rs 4,000 crore-IPO had received Sebi's nod for an IPO in June. The IPO was supposed to hit markets in August but has been delayed and is now expected to launch in September. The company is likely to raise about Rs 3,500 crore from the market, likely to be priced at Rs 850-900 per share.
Lodha Developers also planned to launch its IPO in July, which was postponed later. The Mumbai-based real estate developer is said to raise about Rs 3,300 crore from the IPO.
Food chains Barbeque Nation and Burger King will also launch their IPOs this year. Barbeque Nation is expected to release fresh issue of shares worth Rs 275 crore while Burger King will issue fresh equity shares worth Rs 400 crore with an offer for sale of up to 6 crore shares.
Apart from this, National Commodity and Derivatives Exchange Ltd (NCDEX) also plans to launch the Rs 500-crore IPO in 2020. The company received market watchdog's approval in April this year.
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