Upcoming IPO in India -December 2023

History repeat itself. If you think that you might missed the rally of investing in IPO of Gandhar Oil Refinery India Limited or Tata Technologies, then another set of opportunities is knocking your wisdom on 13th December 2023. Two major IPO (Initial Public Offering) of issue size ₹ 1200 crore are coming: –

  • Doms Industries
  • India Shelter Finance Corporation.

Before we discuss about IPO of these two firms, let understand what IPO or Initial Public Offering is. An Initial Public Offering (IPO) is the mechanism by which privately held companies offer shares to the public, aiming to generate equity capital from individual investors. This transformative process shifts a company from private to public ownership, subjecting it to increased regulatory obligations. Notably, the
IPO provides astute investors with the potential to realize substantial returns on their investments by seizing the opportunity to purchase shares at the initial offering price.

Talking about how was the IPO of Gandhar Oil Refinery India Limited and Tata Technologies which happened on the last week of November 2023. While the price band of Tata Technologies IPO was ₹ 475- ₹500, it is trading currently at around ₹1192.55. It got listed at ₹1200 on NSE (premium of 140% over the issue price) while Gandhar Oil IPO was listed at ₹ 298 at a premium of 76.33% over its issue price of ₹ 169.

The shares further jumped to ₹ 344 , minute after hitting the secondary market indicating stellar premium of 103% over the issue price.

Although both IPOs were about subscribed 64-69 times so all the investors who got the shares in primary market are really lucky. I believe many of you might be feeling sad or unlucky but wait there is another opportunity for all of us. Let start discussing about the two mega IPOs where we all should invest.

Doms Industries, incorporated in 2006 is a leading manufacturer and exporter of stationary products in India with a strong presence in education sector. Our childhood memories are around pencil, eraser, pen, whitener. Doms is leading manufacturer in all these products having presence in more than 40 countries, having 29-30% market share. The company has made an exclusive tie-up with FILA Group for distribution and marketing of their products in South Asia. As on March 2023, they have strong multi-channel distribution networks across the Americas, Africa, Asia Pacific, Europe and Middle East.

Important Information about Doms Industries IPO

Issue
Date
Price
Range
IPO SizeFace
Value
GMP
(Grey
Market
Premium)
Lot sizeExpected
PE Ratio
Debt-Equity
Ratio
RONW
13
Dec-15
Dec
2023
₹ 750-
₹790
₹ 1200 crore
Fresh
Issue=₹350
crore
Offer of
Sale=850
crore
₹10>₹40018
shares
Retail
Investors
can max
invest
up to 14
lots
41.01-
43.19
0.2828.39%

Under the OFS, promoters Fabbrica Italiana Lapis, Sanjay Mansukhal Rajani and Keta Mansukhal Rajani will offload shares. The funds raised through the fresh issue are proposed to be utilized for the part funding of the cost of establishing a new manufacturing facility and for general corporate purposes.


Promoter Share-holding Pre-Issue=100%.


Promoter Share-holding post-issue=74.97%.


About 75% of the offer is reserved for qualified institutional buyers, 15% for non-institutional investors and 10% for retail investors.


Let’s discuss the financial of Doms Industries. (All Figures are in ₹ crores)

Particulars31st March 202131st March 202231st March 202330 th September
2023
Revenue402.82683.401211.89761.80
PAT-6.0317.14102.8773.91
Reserve &
Surplus
233.24246.87337.06341.36
Borrowing97.2784.90100.07176.38
EPS-1.073.0518.29

As per this data, Doms Industries standing at PE ratio of 41.01-43.19, with expected market capitalization of ₹ 4793.77, ROE of 33.54%, ROCE-33.31%, Debt/Equity Ratio of 0.28, EPS of 18.29, RONW of 28.39%. Growth in Revenue as per the data is 73.49%, while growth in PAT is 57.96%

Considering all these data, and GMP of an average ₹ 410, expected listing gain is 18×410/18×790 = 7380/14220 × 100 = 51.89%

Now, let discuss about ISFC (India Shelter Finance Corporation). Incorporated in 1998, engaged in housing finance, this company offers loan amount between ₹ 5 lakh-₹ 50 lakhs for a tenure up-to 20 years. As of November 2023, ISFC has disbursed over ₹ 5500 crore loan helping families, own, extend or improve their homes. Well established firms like LIC Housing Finance, PNB Housing, HUDCO etc are their
competitors.

Important Information about ISFC IPO

Issue
Date
Price
Range
IPO SizeFace
Value
GMP
(Grey
Market
Premium)
Lot sizeExpected
PE Ratio
Debt-Equity
Ratio
RONW
13
Dec-15
Dec
2023
₹ 469-
₹493
₹ 1200 crore
Fresh
Issue=₹800
crore
Offer of
Sale=400
crore
₹5>₹ 20530
shares
Retail
Investors
can max
invest
up to 13
lots
26.85-
28.22
2.12`13.40%

About 50% of the offer is reserved for qualified institutional buyers, 15% for non-institutional investors and 35% for retail investors.

Let’s discuss the financial of ISFC. (All Figures are in ₹ crores)

Particulars31st March 202131st March 202231st March 202330 th September
2023
Revenue316.71447.98584.53385.99
PAT87.39128.45155.34107.35
Reserve &
Surplus
1.341.792.12
Borrowing9.9314.6317.47
Considering these data, growth in Revenue YOY basis is 35.96% while the growth in PAT is 33.96%.

GMP in the Grey Market is of an average ₹ 205, so the expected listing gain is 30×205/30×493 = 6150/14790 × 100 = 41.58%.

Promoter Share-holding Pre-Issue=56.75%.

Promoter Share-holding post-issue=48.17%.

Listing Date of both these IPOs is 20 December 2023.

Please consult us more details about these two IPOs. Stay tuned, Stay Learning.

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