Mazagon Dock Shipbuilders IPO opens today, gets thumbs up from brokerages

 The initial public offering (IPO) of state-owned defence firm Mazagon Dock Shipbuilders Ltd (MDSL) will open for bidding on Tuesday. The price band for the issue has been fixed at Rs 135-145 per share and the bid size is 103 equity shares and multiples of 103 shares thereafter.

The issue will close for subscription on October 1. The offer is expected to raise about Rs 444 crore at the upper end of the price band and at the lower range about Rs 413 crore.

The objectives of the IPO is to carry out the disinvestment of 30,599,017 equity shares constituting 15.17 per cent of company’s pre-offer paid up equity share capital and to achieve the benefits of listing on the stock exchanges, the company said YES Securities, Axis Capital, Edelweiss Financial, IDFC Securities and JM Financial are the managers to the offer.

MDSL is India's leading defence public sector undertaking shipyard under the Ministry of Defence (MoD). It is primarily engaged in constructing and repairing warships and submarines for MoD and other types of vessels for commercial clients.

Here's what leading brokerages suggest regarding the offer -

Geojit Research-- Subscribe

The company's current order backlog is Rs.540,74 crore, ten times the FY20 sales, which provides a strong visibility. New Defence procurement policy 2020, is expected to accelerate indigenization, which is positive for the domestic defence industry.

At the upper price band of Rs.145, MDSL is available at a P/E of 6.1x which is a significant discount to its peers. Considering strong technological and execution capabilities, healthy order book and attractive dividend yield, we assign a 'subscribe' rating for this IPO.

LKP Securities -- Subscribe

At the higher price band of Rs 145, the stock is valued at 6.7x FY20 earnings of Rs 21.4, which looks quite attractive considering its healthy order book, long term visibility of topline growth, competitive edge, profitability, return ratios and dividend payout policy. We recommend investors to 'SUBSCRIBE' with a target of Rs 250 over a time horizon of six months.

ICICI Securities -- Subscribe

MDSL, being the only shipbuilder to have built destroyers and conventional submarines, could have an edge in future orders. Considering the strong order book, superior infrastructure facilities, debt free status, one can expect a better growth outlook for the company in the long run. At the higher end of the price band of Rs 145, the stock is available at a P/E of around 6.1x (on post issue basis). We recommend 'SUBSCRIBE' on the issue with a view of listing gains.

Philip Capital -- Subscribe

Mazagon Dock's IPO valuations are at a 40 per cent discount to theoretical fair value that this business could command. Based on current visibility, we expect MDSL’s Revenue/EBITDA/PAT to grow at 22%/30%/9% CAGR over FY20-25 with ROE’s c.19 per cent. At IPO price, investors can earn 55 per cent returns just through dividend yields over FY21-25. In addition, we believe MDL is well positioned to win at least Rs 1tn of new orders over next 10 years out of Rs 2.1tn opportunity; this should help provide visibility on earnings beyond FY25.

CAMS IPO: Issue subscribed 34 times on day 3; HNI bids at 91.5 times

 The initial public offering (IPO) of Computer Age Management Services (CAMS) was subscribed 33.56 times so far on Wednesday, the last day of the issue. The portion reserved for retail investors was subscribed 4.72 times.

At 3:03 PM, the high networth individuals (HNI) portion of the issue was subscribed 91.5 times, while the portion of qualified institutional buyers was subscribed 42.25 times..

The firm had allotted shares worth Rs 666 crore on Saturday to 35 anchor investors. The anchor investors include Abu Dhabi Investment Authority, Fidelity Funds, Goldman Sachs India, and the Government of Singapore.

It had, on September 18, raised Rs 667 crore from several anchor investors at higher end of price band of Rs 1,229-1,230 per share, as a result the issue size has been reduced to over 1.28 crore equity shares from 1.82 crore shares earlier.

The Rs 2,244-crore IPO is priced between Rs 1,229 and Rs 1,230 apiece. The IPO is a pure offer for sale (OFS), and the company will not receive any proceeds.

CAMS is a financial infrastructure and services provider to mutual funds and other financial institutions. The firm is India's largest registrar and transfer agent of mutual funds (MFs) and enjoys a 70-per cent market share in MF services in terms of average assets under management.

Route Mobile IPO fully subscribed on day 1, most bids from retail investors

 The Rs 600-crore IPO of Route Mobile garnered full subscription on Wednesday, the first day of the issue. Most of the bids so far have come from retail investors. The mobile technology enabler had on Tuesday allotted shares worth Rs 180 crore to anchor investors which included SBI Mutual Fund, Goldman Sachs and Franklin Templeton. Route Mobile IPO comprises fresh fund raising worth Rs 240 crore and the remaining is a secondary share sale by promoters.

The funds raised will be utilized to repay debt, make strategic acquisition and purchase office premises in Mumbai. The price band for the IPO is Rs 345 to Rs 350 per share.

At the top-end, the company will be valued at nearly Rs 2,000 crore on post-dilution basis. Also, the price-to-earnings multiple on based on FY20 earnings works out to nearly 30 times, which is similar to other mid-sized IT firms.

Happiest Minds IPO subscribed 151 times, sees bids worth Rs 58,000 cr

 Happiest Minds Technologies’ maiden initial public offering (IPO) saw a subscription of nearly 151 times, generating bids worth more than Rs 58,000 crore—making it one of the most subscribed IPO in recent times.

The retail investor portion of the issue garnered 71 times the subscription, with over 2 million applications. The wealthy investor portion saw over 351 times the demand for shares on offer, while the institutional portion saw 77 times subscription.

Experts said the huge demand boosts prospects for the IPO market, which has been in a moribund state with only two offerings hitting the market this year.

Through the IPO, Happiest Minds was looking to raise Rs 110 crore in fresh capital. The issue also comprises secondary share sale worth Rs 590 crore.

ALSO READ: Happiest Minds IPO subscribed more than 8 times on day before close

At the top end, the company is valued at Rs 2,440 crore on a post-dilution basis. Happiest Minds is promoted by Ashok Soota, the founding chairman of MindTree. The firm is into digital IT services, with offerings such as cloud, SaaS, security, and analytics.

Most brokerages had recommended their clients to subscribe to the IPO.

“At the higher end of the price band, the issue is valued at 29 times FY20 P/E (fully diluted), which is comparable to larger mid-sized IT companies. We like the company given its strong presence in digital services; scalable business model with end-to-end capabilities and fast improving financial performance,” a note by Motilal Oswal said.

Happiest Minds IPO opens today. Key things to know before you invest

 The initial public offer (IPO) of Happiest Minds Technologies, the Bengaluru-headquartered information technology (IT) services firm, opens today. The company aims to raise up to Rs 702 crore via fresh issue of equity shares aggregating up to Rs 110 crore and an offer for sale (OFS) of up to 35.663,585 shares. On Friday, the company raised Rs 315.90 crore from anchor investors.

Here's a look at the key things you need to know before you invest.

About the Company

Happiest Minds Technologies is an information technology (IT) services firm founded by Ashok Soota, a veteran in the Indian IT industry. The company focuses on delivering a seamless digital experience to its customers. It offers solutions across the spectrum of various digital technologies such as Robotic Process Automation (RPA), Software-Defined Networking/ Network Function Virtualisation (SDN/NFV), Big Data and advanced analytics, Internet of Things (IoT), Cloud, Business Process Management (BPM) and security. The company's business is divided into three business units (BUs) - Digital Business Services (DBS), Product Engineering Services (PES), and Infrastructure Management & Security Services (IMSS).

About the Offer

Around 42.29 million shares will be put on the block, wherein the fresh issue comprises 6.62 - 6.66 million shares and OFS consists of 35.66 million shares. The price band of the offer has been set between Rs 165-166. At the upper price band, the company will garner Rs 702 crore. The bid lot has been fixed at 90 shares and in multiples thereof. The offer closes on September 9.

Objects of the issue

The net proceeds of the offer will be utilised to meet the long term working capital requirement of the company and general corporate purposes.

Key risks

Geographic concentration: The United States alone contributes 77.5 per cent of its overall revenues (FY20). Anti-outsourcing legislation, if passed, would pose a threat owing to higher onsite ratio and /or insourcing by customers.

Client concentration risk: The company, in its draft red herring prospectus (DRHP), says that its higher contribution of revenues comes from a small number of clients. Loss of a key client and lower quantum of repeat business from existing clients can impact the revenue and earnings growth.

Intense competition: Happiest Minds faces tough competition from top-tier and mid-tier IT firms such as Accenture, TCS, Infosys, Wipro, HCL Technologies, Mindtree, and Persistent Systems, which are rapidly expanding their digital offerings and gaining scale.

Unfavorable movement in forex rates: Since the company is heavily dependant on the US for business, as well as some part in the UK, the company is likely to get impacted by major foreign currency swings, mainly of the US dollar and GBP (pound sterling) against the rupee.

Partial promoter holding pledged: Ashok Soota and Ashok Soota Medical Research LLP have pledged 24,122,331 equity shares and 17,948,784 equity shares, respectively. In the event of non-adherence to the terms and security arrangements, the pledge on the company's promoter’s shares could be invoked, which may also lead to a change in control.

Should you subscribe?

Most analysts are positive on the company and recommend subscribing to the issue given Happiest Minds' line of business operations, healthy financial performance, strong promoter pedigree, and attractive valuation.

"At the price band of Rs 165-166, the issue comes priced at a price/earnings (PE) ratio of 16.5 times - 17.3 times FY22E earnings per share (EPS), assuming a 15-20 per cent profit before tax (PBT) growth in FY22 and factoring in 25 per cent tax rate for the year. Based on these calculations and assuming two scenarios of 15 per cent and 20 per cent growth, Happiest Minds can achieve diluted EPS of Rs 9.6-10 in FY22, on the basis of which the PE multiple works out to 16.5x-17.3x FY22E EPS," said Harit Shah, an analyst at the KR Choksey Research.

"Given HMT’s growth profile and over 97 per cent digital revenue share, we believe the company can comfortably command a PE of 24x-25x, which makes the IPO valuation fairly attractive for long-term investors. We recommend a SUBSCRIBE to the issue," Shah added.

For analysts at IIFL Securities, the IPO offers an opportunity to invest in an Indian pure-play digital IT services provider, which is likely to post top-tier growth rates in the IT space. Compared to its listed international peers (EPAM, Globant & Endava), they believe, Happiest Minds is much smaller with a lower growth profile. However, it generates a higher return on equity (ROE) and has an average free cash flow to the firm (FCFF) conversion of nearly 130 per cent over FY18-20, the brokerage wrote in an IPO note dated September 3. The brokerage, too, has a SUBSCRIBE rating to the issue.

At Geojit Financial Services, Vinod Nair, their head of research also recommends subscribing to the issue from a long-term perspective. "FY18-20 revenue growth stood at 23 per cent on a compound annual growth rate (CAGR) basis, while profit witnessed a steady growth from Rs 14 crore in FY19 to Rs 72 crore in FY20 due to increase in sales, lower operating expenses and 50 per cent reduction in interest cost in FY20," Nair notes.

However, Nirali Shah, senior research analyst at Samco Securities, advises investors to avoid this IPO given the risks attached. The company, Shah said, carries a larger-than-industry-average level of debt on its books, indicated by a debt to equity ratio of 0.92. This includes high working capital liabilities and current liabilities to the tune of Rs 211 crore.

"The company plans to reduce this liability to an extent with the IPO funds but even then there will be a significant chunk of current liabilities on its books. Further, its operating cash flows to the company's earnings before interest, taxes, depreciation, and amortisation (EBITDA) has also declined from 2018 to now. To add to it, promoters have pledged 30 per cent of their total shares to raise capital. All these negatives outweigh the fact that this IT company trades at a fair valuation of 23x P/E," Shah added.

Ujjivan SFB's Rs 750-cr IPO priced at 3x its book value; issue opens Dec 2

The initial public offering (IPO) of Ujjivan Small Finance Bank (SFB) will open on December 2. The price band has been fixed at Rs 36-37 a share. The issue will close on December 4. Bids can be made for a minimum 400 equity shares and in multiples of 400 shares thereafter.
The proposed issue of Ujjivan SFB comprises fresh issue of equity shares aggregating up to Rs 750 crore and a reservation of equity shares aggregating up to around Rs 75 crore for subscription by eligible shareholders of Ujjivan Financial Services.

Samit Ghosh, founder, Ujjivan SFB, told reporters at the press conference: “After we do this IPO, the promoter-shareholding will be down from 100 per cent to 84-85 per cent. Over the next two years, we will have to reduce the shareholding to 40 per cent. This is something we want to take up with the Reserve Bank of India (RBI) after we have completed with this listing.
Microfinance lender Ujjivan Financial Services is the holding company of Ujjivan SFB.
The shareholders of Ujjivan Financial Services will get shares at a discount of Rs 2 per share to the final issue price.
The SFB reduced its issue size after fundraising in a pre-IPO placement of over 71.4 million shares totalling Rs 250 crore, at about Rs 35 per share.
The SFB had received approval for the public issue from the Securities and Exchange Board of India in October.
In its red herring prospectus, the SFB said proceeds of the fresh issue would be utilised towards augmenting its tier–1 capital base to meet future requirements, and issue expenses.
The book running lead managers to the issue are Kotak Mahindra Capital Company, IIFL Securities, and JM Financial. Karvy Fintech is the registrar to the issue.
While talking about the economic slowdown, Ghosh said, “There is no slowdown in the microfinance sector and, in fact, we have seen some growth opportunities in the housing sector because some players left, but yes, there is slowdown in the micro, small and medium enterprises sector.”
Commenting on the reverse merger possibilities, Ghosh added, “We have been in discussion with the RBI about the reverse merger at the end of five years. The RBI has told us once you complete five years, you can come back to us. Based on their comfort level with us, they would consider it for a reverse merger.”

Hong Kong defies upsurge in protests, leads global IPO market since Sept

Hong Kong’s IPO market is making a huge comeback.
Defying the intensifying protests that have hurt the city’s economy from trade to tourism, Hong Kong’s has led the world in initial public offerings since the start of September.

The total value of first-time share sales at the Hong Kong stock exchange since Sept. 1 is $7.9 billion, overshadowing Nasdaq Inc.’s $7 billion and $3 billion at the New York stock exchange, according to data compiled by Bloomberg. Anheuser-Busch InBev NV’s $5.8 billion IPO of its Asian unit and another billion-dollar-plus deal contributed to the lead held by the Asian financial center.
“The market has been volatile and challenging this year but we are now in a good window for IPOs in Hong Kong, ” said Alex Abagian, co-head of Asia Pacific equity capital markets at Morgan Stanley. “We are seeing a significant amount of quality capital being deployed towards good assets, primarily companies that are market leaders in their sector.”
While summers are typically quiet for first-time share sales in Hong Kong as bankers and investors go on holidays, the escalation of the pro-democracy protests and the trade war between China and the US damped companies’ enthusiasm further this year. The total raised in IPOs plunged to $1.5 billion for the July-August period from $11.6 billion a year earlier, which was the busiest summer on record with listings of China Tower Corp. and Xiaomi Corp..
Sentiment in Hong Kong’s primary market turned around as AB InBev revived its IPO plan for Budweiser Brewing Company APAC Ltd. last month. The world’s second-largest offering this year attracted Singapore’s sovereign fund GIC Pte Ltd., which committed $1 billion. The sale was priced at the bottom of the marketed range and AB InBev partially exercised a right to increase the number of shares sold. Two weeks later, Chinese sportswear retailer Topsports International Holdings Ltd. priced its $1 billion initial share sale.
ESR Cayman Ltd., a logistics real estate developer, is set to raise $1.6 billion as it’s expected to price its IPO at the middle of a marketed range, people familiar with the matter said earlier. That deal could be the second-largest transaction in the territory.
The rejuvenated momentum is also evident among the retail investors in the city. Some small-cap IPOs saw heavy over-subscriptions and frenzied trading in their debuts. Ascentage Pharma Group International attracted orders for 752 times its initial retail tranche this week, while shares of software developer 360 Ludashi Holdings Ltd. more than tripled on Oct. 10 on its first day of trading.
Elsewhere, WeWork called off one of the year’s most hotly anticipated IPO in New York last month. In Australia, Latitude Financial Group Ltd. shelved what would have been the country’s biggest share sale this year, citing worries about how the company would trade on its debut. That was followed by PropertyGuru Ltd.’s IPO withdrawal.
For the year, Hong Kong’s bourse could still come in third or even fourth in first-time share sales, trailing the exchanges in New York and Shanghai. So far in 2019, the city’s IPO volumes have dropped 43 per cent from a year earlier to $18.6 billion, data compiled by Bloomberg show.
The city could still experience a late flurry, keeping bankers busy, Morgan Stanley’s Abagian said.
“On the back of the recent pick-up in activity, we remain reasonably optimistic for the rest of the year, with the coming five to six weeks expected to be busy in terms of IPOs and block trades,” he said.

IPO filings down 45% until September as weakness in market takes toll

Market weakness is coming in the way of companies getting listed on the exchanges. The data sourced from Prime Database shows 13 companies have filed for initial public offering (IPO) in the current calendar year, and that is 45 per cent lower than in the corresponding period last year.
In the first nine months of last year (i.e. till September 30), 24 draft prospectuses (DRHPs) were filed. Compared to last year’s tally of 31, the number of filings is 58 per cent lower. Investment bankers say filings are likely to remain on the lower side unless policy decisions give a fresh impetus to the markets.

“The tax cuts by themselves may not lead to a structural turnaround. We need measures that can spur demand and get consumption moving, which in turn will make market conditions more conducive,” said Rajendra Naik, managing director, Centrum Capital.
Further, bankers say companies are delaying their IPO plans because they don’t see any IPO window for at least six more months.
“Typically, observations from the Securities and Exchange Board of India (Sebi) are received within two-three months of filing a DRHP. After that, companies have a year to complete their IPO. Unless they see a clear window, companies don’t want to file, and just watch their approvals getting lapsed,” Naik added.
ChartExperts say companies may show an interest after the strong response the IPO of the IRCTC received. The Rs 640-crore issue was subscribed 112 times. “Some promoters may start checking with merchant bankers whether they can go ahead with their IPO plans,” said Pranjal Srivastava, independent capital market professional.
Another banker said: “The major hurdle is that promoters and other existing investors have certain valuation multiples in their minds, which is difficult to fetch in the current environment.”
Market sentiment received a blow on Friday after the Reserve Bank of India revised its growth forecast from 6.9 per cent to 6.1 per cent.
The benchmark indices cracked over 1 per cent, closing 730 points lower than the day’s highest point.
The markets have become nervous owing to concerns among banks over stressed exposures, combined with sluggish consumer demand as reflected in the slowdown in the auto segment and other sectors.
Bankers say “we could still see some quality IPOs hitting the markets”, but the volumes will only start to pick up once all the issues get addressed and there is a sustainable shift in investor sentiment.
On the global front too, the situation has been bleak. A recent study by EY India pointed out how fresh equity issuances have petered down in global markets. In the September quarter, 256 IPOs came to the markets globally, with total proceeds of $40.2 billion. This was 24 per cent lower in volume terms and 22 per cent lower in value terms, compared to corresponding period last year.

Second phase of UPI mechanism for IPOs in place; Sebi provides banks list

Retail investors bidding for shares in an IPO through intermediaries should make payments only through the UPI mechanism, according to the regulator.
The second phase of UPI as a payment mechanism commenced from July 1. In a circular on Friday, the watchdog provided a list of 45 banks through which retail investors can apply for IPO using UPI mechanism.
Read our full coverage on UP

IPO market hots up as 3 dozen companies line up listings worth Rs 350 bn

The IPO lane seems to get busier as three dozen companies have lined up initial share sale plans worth Rs 350 billion in the coming months, largely to fund their expansion projects and working capital requirement.
These include six state-run entities -- Indian Renewable Energy Development Agency, Rail Vikas Nigam, IRCON International, RITES, Garden Reach Shipbuilders and Engineers and Mazagon Dock -- as the government intends to unlock the real value of such PSUs and bring in greater accountability.

Of these three dozen firms, most of these companies plan to utilise initial public offer (IPO) proceeds for business expansion as well as working capital requirements, as per the draft papers filed with the Securities and Exchange Board of India.
Besides, some of the firms believe the listing of equity shares on bourses will enhance their brand name and provide liquidity to existing shareholders.
"After raising record funds through IPOs in 2017, the primary markets in this year will also witness healthy fundraising activity driven by improving utilisation levels across industries and tightening of credit availability on account of poor state of affairs in banking industry," Director, Capital Market of Equirus Capital Munish Aggarwal said.
In this year, Barbeque-Nation Hospitality, TCNS Clothing Company, Nazara Technologies and Devi Seafoods are among the 12 companies that have secured Sebi's nod to float their public offers.
In addition, 24 companies including Route Mobile, CreditAccess Grameen, Sembcorp Energy India, Flemingo Travel Retail and Lodha Developers are awaiting the regulator's approval to float IPOs.
Together, these companies are expected to raise about Rs 350 billion, merchant banking sources said.
Moreover, 15 companies including ICICI Securities, Bandhan Bank, Hindustan Aeronautics and Mishra Dhatu Nigam have already hit the capital markets so far this year.
According to experts, the IPO market will continue to see hectic activity as over a dozen firms are awaiting Sebi's nod to launch their public issues.
"The IPO market is buoyant for good quality company issues which are priced cautiously. There is investor appetite for companies which price their IPOs keeping money-on-table for investors," J Kalyaniwala, vice president of investment banking at Prabhudas Lilladher said.
The year 2017 saw 36 companies collectively raising a record over Rs 670 billion through their respective initial share-sales. The previous high being in 2010 when Rs 37.5 billionwas garnered, almost half the amount.
Experts said that proactive regulatory environment coupled with uplifted investor sentiment has helped the IPO market.

From IRFC to Mazagon Dock, glut of PSU public offers to continue in 2018-19

The spree of initial public offerings of equity (IPO) by state-owned firms will continue in 2018-19. First up are likely to be rail companies Rites and IRFC, which will be taken public by May, Business Standard has learnt.
Two more rail public sector undertakings (PSUs), Ircon and RVNL, are expected to follow later in the year. However, the planned IPO of IRCTC has been put in cold storage indefinitely, with neither the rail ministry nor the department of investment and public asset management in favour.

The government's combined disinvestment target for 2018-19 is Rs 800 billion. The other IPOs expected include Mazagon Dock Shipbuilders, Garden Reach Shipbuilders & Engineers, and three general insurance PSUs, which will be merged into a single entity and then listed on the exchanges. These are National Insurance, Oriental Insurance and United India Insurance. The two shipbuilders are expected to be taken public in the first half of the coming financial year.
According to senior government sources, the listing of Rites and IRFC will happen before May-end, Rites being the first. That IPO could involve a 12 per cent stake of the Centre. In the case of IRFC, 10 per cent could be offloaded. A 25 per cent stake sale is being planned with RVNL.
Earlier, there were doubts over the IRFC listing because of a deferred tax liability issue. However, the ministry of corporate affairs has since exempted the company from an accumulated deferred tax liability of Rs 63.92 billion, which will add to the net worth.
There are various reasons why the planned IRCTC offer is now in cold storage. "When a major source of income of a company is service charge on booking of tickets and other services, and when that service charge is removed by the government, investor interest will, of course, be lukewarm," said an official when asked why.
In the aftermath of demonetisation, the Narendra Modi government took a number of steps to popularise digital transactions. One of these was to phase put the service charge levied by IRCTC.
The move had wiped out Rs 5 billion from IRCTC's annual revenue. Though the finance ministry was expected to reimburse this, only Rs 800 million was reimbursed. SBI Capital Markets, IDBI Capital Markets & Securities, Elara Securities India, and IDFC Bank are the advisors to Rites for the issue. ICICI Securities, SBI Caps, IDFC and HSBC are bid managers for IRFC.
The year 2017-18 saw a record six IPOs of PSUs, which netted but Rs 240 billion, nearly a quarter of the year's revised disinvestment estimate of Rs 1 trillion. These companies were New India Assurance, General Insurance Corp, HAL, Bharat Dynamics, Cochin Shipyard and Hudco.

Bandhan Bank's Rs 45-bn IPO subscribed 14.6 times on last day of offer

Bandhan Bank's initial public offering (IPO), one of the biggest by a domestic bank, saw over 14 times demand the shares on offer. Despite weak secondary market conditions, the offering generated demand worth Rs 245 billion as against Rs 31 billion worth of shares on offer.Bandhan Bank's initial public offering (IPO), one of the biggest by a domestic bank, saw over 14 times demand the shares on offer. Despite weak secondary market conditions, the offering generated demand worth Rs 245 billion as against Rs 31 billion worth of shares on offer.
The Kolkata-based lender had already raised Rs 13.4 billion for its Rs 45-billion IPO from anchor investors. Bulk of the demand in the IPO came from institutional investors. The so-called qualified institutional buyer (QIB) portion of the issue was subscribed 39 times. The non-institutional investor portion, commonly referred to as high-networth individual (HNI) quota, was subscribed 14 times, with most of the bids in the segment coming from 'corporates'. The retail portion, however, failed to garner much demand with the portion seeing just 1.2 times subscription.
The microfinance-focused bank IPO comprised of fresh fundraising worth Rs 37 billion and secondary share sale worth Rs 8 billion by the International Finance Corporation (IFC), an investment arm of the World Bank.
The price band for the IPO has been fixed at Rs 370 to Rs 375 per share. At the top end of the price band, Bandhan Bank will be valued at nearly Rs 450 billion, making it the eight most valuable bank in the country.
There has been a huge demand for the IPO despite the lender asking for steep valuations compared to other private sector peers. At the top-end of the price band, Bandhan Bank is valued at more than four times its price-to-book ratio.
Most analysts have given a thumb's up to the IPO given the lender's focus on underbanked and underpenetrated markets. Bandhan Bank's consistent track record, low-cost model and high margins warranted a premium, analysts said.

HAL, ICICI Securities among several firms lining up Rs 250-bn public offers

The IPO lane seems to get busier as over two dozen companies have lined up initial share sale plans worth Rs 250 billion in the coming months, largely to fund their expansion projects and working capital requirements.
Hindustan Aeronautics, ICICI Securities, Barbeque-Nation Hospitality and Flemingo Travel Retail are among the names that plan to launch share-sale offers in the coming months.
Most of these companies plan to utilise initial public offer (IPO) proceeds for business expansion as well as working capital requirements, as per the draft papers filed with capital markets regulator Sebi.
Besides, some of the firms believe the listing of equity shares on bourses will enhance their brand name and provide liquidity to existing shareholders.
Barbeque-Nation Hospitality, ICICI Securities, Bharat Dynamics and Indian Renewable Energy Development Agency -- have secured Sebi's go-ahead this year to float their public offers.
In addition, 20 companies including RITES, Mishra Dhatu Nigam Ltd, Bandhan Bank, IndoStar Capital Finance, Nazara Technologies and Route Mobile are awaiting the regulator's approval to float IPOs.
Together, these companies are expected to raise nearly Rs 250 billion, merchant banking sources said.
Moreover, five companies, including Newgen Software Technologies and Amber Enterprises India, have already hit the capital markets
According to experts, the IPO market will continue to see hectic activity as over a dozen firms are awaiting Sebi's nod to launch their public issues.
Besides, higher valuation of secondary market would attract investors towards IPOs.
The year 2017 saw 36 companies collectively raising over Rs 670 billion through their respective IPOs, making it the best year. The previous high being in 2010 when Rs 375.35 billion was garnered, almost half the amount.
Experts said that proactive regulatory environment coupled with uplifted investor sentiment has helped the IPO market.

Rs 1.56-bn Apollo Micro Systems' IPO subscribed 250 times on last day

The Rs 1.56-billion initial public offering (IPO) of Apollo Micro Systems garnered a whopping 250 times subscription, generating demand worth Rs 162 billion. The institutional portion of the IPO was subscribed 104 times, high net worth individual (HNI) was subscribed nearly 976 times and the retail quota saw close to 40 times more demand than shares on offer. The IPO garnered over 1.2 million applications.
Apollo Micro is a manufacturer of electronic equipment for the defence sector.
The price band for the IPO was Rs 270 to Rs 275 per share. At the top end of the price band, Apollo Micro was valued at 17 times its FY20 estimated earnings. Through the IPO, the company will raise Rs 156 crore which will be used towards its working capital requirement.