In a topsy-turvy year for the IPO market, these five new entrants saw stellar debuts
The year 2020 has been a mixed bag for capital markets, and while many IPO hopefuls decided to withdraw their listings and wait for things to settle, others powered through. With money starting to flow back into the markets, the IPO market is picking up steadily.
It wouldn’t be too much of a stretch to say that the Indian IPO market in 2020 was a roller coaster ride.
We began the year on a strong note with the blockbuster initial public offering of SBI Cards, which was heavily oversubscribed and rose manifolds after its debut. Then the pandemic hit, bringing with it a lot of volatility and uncertainty, which pushed investors to the sidelines as they waited for the capital markets to fully realise the impact of COVID-19.
Recovery started in July when the lockdowns were largely lifted, businesses staggered back to work, and the Indian government announced stimulus packages for the struggling SME and MSME sector. Capital markets, too, bounced back as more retail investors and first-time traders started investing in equities, mutual funds, and bonds, thanks mainly to the traction online discount brokers such as Zerodha and Groww saw over the lockdown months.
Since July, several hit IPOs have happened on the BSE and the NSE, characterised by oversubscriptions, debut surges, and continually rising share prices since listing.
Here’s a quick look at some of FY2020’s biggest IPOs so far:
Route Mobile Ltd
Listing date: September 21, 2020
Cloud enterprise communication services company Route Mobile listed on the BSE and the NSE via a Rs 600 crore IPO. It set its offer price range between Rs 345 and Rs 350 per share, and its final issue price was Rs 350 per share at the upper end of its band. The IPO was subscribed 75X.
Route Mobile’s shares rose 86 percent in its market debut at Rs 708 apiece — nearly double its issue price. Its shares presently trade at Rs 1,098.25 on the stock exchanges, up nearly 213.8 percent than its final IPO price of Rs 350.
Analysts are bullish on the stock since Route Mobile has no listed peers, and believe the company can offer long-term gains.
Communication technology gained massive popularity during the lockdown months as businesses looked for better ways to communicate with their teams and customers. Hundreds and thousands of companies have permanently moved to a work-from-home format, and companies like Route Mobile stand to gain from such changing trends.
Burger King India Ltd
Listing date: December 14, 2020
Among the fastest-growing international QSRs in India, Burger King India Ltd’s Rs 810 crore was subscribed over 156 times earlier this month. The IPO price range was between Rs 59 and Rs 60 apiece, and the final IPO pricing was Rs 60 at the upper end of the band.
Burger King India’s shares jumped nearly 131 percent in debut — the best since 2017 when Astron Paper & Board Mill Ltd surged 142 percent. From its final IPO price, Burger King India’s shares have soared 170 percent to Rs 162 as of midday trading on Tuesday.
With the arrival of the COVID-19 vaccine imminent, QSRs, restaurants, and cloud kitchen companies are expected to see business booming, especially as people start ‘revenge-travelling’ after months of staying home.
Happiest Minds Technologies
Listing date: September 17, 2020
Ashok Soota, founder of Happiest Minds Technologies
The Rs 702 crore IPO of IT solution services provider Happiest Minds Technologies was subscribed 151 times — seeing a bid for 3.51 billion shares — compared to the 23.3 million on offer.
The price range for the IPO was Rs 165 to Rs 166 per equity, and shares priced at the upper end of the range was Rs 166. In its market debut, shares rose 123 percent from its final IPO price.
As of midday trading on Tuesday, its shares had risen 95 percent from its IPO price.
The Ashok Soota-led company’s IPO received a strong response from institutional investors, as well as retail investors, who bet on the seamless and end-to-end digital experience it provides. Happiest Minds Tech offers solutions for digital businesses, product engineering, infrastructure management, and security. Analysts have said the business is poised for robust growth, led by its digital services, especially during the COVID-19 pandemic.
Rossari Biotech Ltd
Listing date: July 23, 2020
Speciality chemicals manufacturer Rossari Biotech was the first successful IPO this year after SBI Cards in March. Launching shortly after the lockdowns were lifted, Rossari’s Rs 496 crore IPO was subscribed almost 80 times, mostly from non-institutional and retail investors.
Its final IPO pricing per share was Rs 425, and its shares popped 57 percent in debut. As of midday trading on Tuesday, its shares had nearly doubled to Rs 827.10 from its final IPO price.
With a presence in over 17 countries, analysts have pegged Rossari as a strong stock in a competitive landscape. Samco Securities has lauded its robust management and sound corporate governance policy. In fact, it said those would reflect in its growth going forward.
Rossari launched its IPO at a time when the rest of the market was floundering and searching for a support price during the pandemic. Antony Waste Handling Cell, another market hopeful, had to withdraw its IPO in March when the markets began to tank. Rossari followed Antony Waste Handling Cell, and its IPO met with success in a market looking for robust business investment opportunities.
Gland Pharma Ltd
Listing date: November 20, 2020
Injectibles-focused Gland Pharma made history as India’s biggest pharma IPO offering, with shares popping as much as 14 percent in debut.
Its shares priced at the upper end of their Rs 1,490 to Rs 1,500 range and the IPO was subscribed 2.06 times. Gland Pharma’s shares have risen 45.6 percent as of midday trading on Tuesday from their IPO price.
“Gland Pharma is a niche player, focused on injectables. It has a proven track record of growth and profitability along with a consistent regulatory compliance history. It has never received a negative USFDA report. The future prospects are bright as it has 267 ANDA filings of which 215 are approved," said Hemang Jani, Head of Equity Strategy, Broking, and Distribution at Motilal Oswal Financial Services.
Backed by China’s Fosun Pharma, Gland could see some tailwinds from the COVID-19 vaccines that are expected to be made available in India soon. The company develops, manufactures, and markets complex injectables in India.
Edited by Suman Singh