Following the success of five IPOs so far this month, three more companies, UTI AMC, Mazagon Dock Shipbuilders and Likhitha Infrastructure, are set to launch initial public offerings (IPOs) next week. Three out of five, Happiest Minds Technologies, Route Mobile and NSE-backed CAMS, have witnessed oversubscription at record levels. Happiest Minds and Route Mobile shares more than doubled on market debut with listing at 111 per cent and 105 per cent premium over issue price, respectively. While CAMS and Chemcon Speciality Chemicals IPOs saw upbeat sentiments, subscribing 47 times and 149 times, respectively. Market watchers say UTI AMC and Mazagon Dock Shipbuilders appear decent picks from a listing gains perspective. All these three IPOs will open for subscription from September 29 to October 1, 2020.
All you need to know about these IPOs:
UTI AMC Rs 2,160-crore IPO:
The second-largest asset management company by assets under management has fixed the price band at Rs 552-554 per equity share. It will include OFS from existing shareholders like State Bank of India (SBI), Life Insurance Corporation (LIC), Bank of Baroda (BoB), Punjab National Bank (PNB), and T Rowe Price International (TRP). Investors can bid for a minimum of 27 equity shares and in multiples of 27 shares thereafter. Analysts say that UTI AMC has received a mandate to manage 55% of EPFO in 2019 which has significantly boosted its AUM. “This AMC has delivered decent returns and profit margins in the past few years with a mcap to equity QAAUM of 18% compared to HDFC AMC’s 29%,” said Nirali Shah, Senior Research Analyst, Samco Securities. Additionally, this year itself it granted ESOPs at Rs 728 per share while its price band is at Rs 552-554/share which means it leaves more money on the table for investors for listing gains.
Mazagon Dock Shipbuilders Rs 444-crore IPO:
State-owned defence firm Mazagon Dock Shipbuilders has fixed the price band at Rs 135-145 per share. The initial public offering is of 3.05 crore shares through an offer for sale (OFS), which includes a reservation of 3.46 lakh shares for eligible employees. Bids can be placed for a minimum of 103 equity shares and in multiples of 103 thereafter. Around 3.45 lakh shares have been reserved for eligible employees. Market analysts say that despite being a dominant player with high barriers to entry, Mazagon is also debt-free and enjoys a few perks due to its proximity to the coasts of Mumbai. “How quickly it is able to execute orders and generate cash flows will decide Mazagon’s future growth trajectory,” Nirali Shah said. There could also be a delay in funding from the Indian Defence Budget or risks of cost and time overruns due to government dependency. “Hence, this company is at a higher risk and can be looked for listing gains keeping in mind an investor’s own risk appetite,” Shah said.
Likhitha Infrastructure Rs 61.2-crore IPO:
Oil and gas pipeline infrastructure service provider Likhitha Infrastructure has fixed price band of Rs 117-120 per share for its IPO. The initial public offer consists of fresh issue of up to 51 lakh equity shares. Investors can subscribe to the IPO by placing bids for a lot of 125 shares or in multiples thereof, meaning one will have to shell out at least Rs 14,625 to bid for the issue. The proceeds will be utilised by the company towards its working capital requirements so as to capitalise on the growing demand from the oil and gas sector, and for general corporate purposes. Unistone Capital Private Limited is the book running lead manager and Bigshare Services Private Limited is the registrar to the issue.