The IPO market is pulsating with activity again, with six scheduled IPOs, including the launch of DOMS Industries and the availability of India Shelter Finance for subscription today. The Sensex and Nifty 50 have reached all-time highs, the macro environment is getting busier, and investors seem to be acutely aware of everything that is happening in real-time.
The trajectory of the global economy will be significantly impacted by the Fed’s announcement tonight. Investors are busy with the primary market, but before making any big moves, the markets will wait for the Fed chairman’s remarks.
Investors don’t know which of these IPOs to subscribe to or avoid because they all have similar open and close dates and are from various industries.
Investor reaction to the DOMS Industries IPO has been outstanding thus far, whereas the India Shelter Finance IPO is still struggling to get through its first day of subscription.
Here’s all you need to know before IPOs open for subscription today:
India Shelter Finance Corporation
Financer of affordable housing with support from WestBridge Capital and Nexus Venture Partners, India Shelter Finance Corporation aims to fund ₹1,200 crore at the upper end of the issue price. The company has set a price band of ₹469–493 per share. On December 20, the shares are anticipated to go live on the BSE and NSE.
The Gurugram-based housing finance company collected ₹360 crore through an anchor book before its initial public offering (IPO) by selling 7,302,229 equity shares to 38 anchor investors for ₹493 apiece.
The IPO consists of an offer to sell 81.13 lakh shares valued at ₹400 crore and a new issuance of 1.62 crore shares valued at ₹800 crore.
Because there will be numerous lots of 30 shares in the IPO, the lowest application amount for one lot will be ₹14,790, and the highest would be ₹192,270 for 13 lots, or 390 shares. Qualified institutional buyers (QIBs) will receive half of the offer, non-institutional investors (NIIs) will receive 15%, and retail investors will receive the remaining 35%.
The money earned from the sale of new stock will be used by the company to cover its capital needs for further lending. A portion of the fund will be used for standard business needs.
India Shelter Finance Corporation was founded in 1998 and offers low- and middle-class borrowers home loans as well as loans secured by property. India Shelter Finance operated a network of 183 branches as of March 31, 2023, primarily in the states of Rajasthan, Maharashtra, Madhya Pradesh, Karnataka, and Gujarat, but also in 15 other states.
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DOMS Industries
Leading the Indian stationery and art products sector, the Gujarat-based company hopes to collect ₹1,200 crore through an initial public offering (IPO) at a price range of ₹750-790 per share. On December 20, the company’s shares are scheduled to launch on stock exchanges.
At ₹790 per share, the company has already raised ₹537.75 crore through the issuance of 68,06,961 equity shares to anchor investors.
A combination of newly issued shares valued at ₹350 crore and an offer by current shareholders to sell their shares for ₹850 crore makes up the DOMS IPO. The remaining 10% of the issue is designated for retail investors, with the remaining 75% going to QIBs, 15% to NIIs, and ₹5 crore worth of shares reserved for company personnel, who will receive these shares at a discount of ₹75 each to the final issue price.
The minimum amount for retail investors would be ₹14,220 for 1 lot and the highest amount would be ₹199,080 for 14 lots or 252 shares. The lot size is 18 shares and in multiples thereof.
The pencil manufacturer intends to use the money raised from the fresh issue for general corporate purposes, to expand its production capabilities for a variety of writing instruments, including watercolor pens, markers, and highlighters, and to cover the cost of building a new manufacturing facility.
Founded in 2006, DOMS is a prominent producer of stationery and art supplies. It operates in more than 40 countries worldwide, encompassing the Americas, Africa, Asia Pacific, Europe, and the Middle East belt. Its primary brand is “DOMS,” and its subsidiary brands are C3, Amariz, and Fixy Fix. The seven product categories—scholastic stationery, scholastic art material, paper stationery, kits and combos, office supplies, hobby and craft, and fine art products—comprise over 3,770 SKUs.
Experts Reviews
Mohit Gulati, CIO & Managing Partner of ITI Growth Opportunities Fund
“For DOMS IPO, I can only say, “Make Hay when the Sun is shining!” After the recent success of writing instrument companies, getting a significant player in scholastic stationery to list at the heights of this euphoric bull market is only fair. Businesses like these are, in some ways, similar to staple FMCG- evergreen and unfazed by the usual downhills of macros.
At a PE of 40x+, it’s fairly valued and can surely showcase some listing gains. I would undoubtedly subscribe to this one.
India Shelter, with its 15-state presence to me, is a thinly spread-out HFC. My limited learning in lending businesses is “It’s easy to build a book; difficult to recover it”. For me, promoter holding in the company is too low to draw comfort. That said, from a listing gain perspective, this could be pop, but my pecking order would have DOMS over India Shelter,” said Gulati.
Vinit Bolinjkar, Head of Research, Ventura Securities
“One should pick India Shelter Finance IPO over Doms Industries IPO,” said Bolinjkar.
According to Vinit, India Shelter provides home loans and loans against property (LAP) to individuals in tier-II and tier-III regions, catering to both salaried and self-employed clients. With a presence in 15 states and 203 branches, the company manages a total Assets Under Management (AUM) of ₹5,180.7 crore as of September 2023.
In terms of AUM composition, 71% is attributed to self-employed individuals, while the remaining 29% represents salaried individuals. The average loan ticket size is ₹10 lakh. As of September 2023, home loans and LAP constitute 58.2% and 41.8%, respectively, of the total disbursement amounting to ₹1,220.3 crore.
(Experts’ Reviews are taken from an excerpt of LiveMint.com article)