Sona BLW, Shyam Metalics, Dodla Dairy, KIMS IPO to open next week; should you invest?

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It’s going to be raining IPOs next week. At least four initial public offerings (IPO) including Sona BLW Precision Forgings, Shyam Metalics and Energy, Dodla Dairy and Krishna Institute of Medical Sciences (KIMS) to hit the primary market to raise over Rs 8,500 crore. Here’s all you need to know about upcoming public offerings.

Sona BLW Precision Forgings Auto component maker Sona BLW Precision Forgings has fixed a price band of Rs 285-291 a share for its Rs 5,550 crore IPO. The three-day public offer will open on June 14 and conclude on June 16. The public offer comprises fresh issue of shares amounting to Rs 300 crore and an offer for sale (OFS) aggregating up to Rs 5,250 crore by selling shareholder Singapore VII Topco III Pte Ltd, an affiliate of the Blackstone Group Inc.

According to Sharekhan, the offer is valued at 76.0/77.6 times its FY2021 EPS, considering the diluted equity at the upper and lower price band. The company’s net profit from continuing operations clocked a 46.6% CAGR from FY19-21 at Rs 215 crore, aided by a 49.7% revenue CAGR and partially mitigated by a 40 bps decline in operating profit margin at 28.2% in FY21 as compared to 28.6% in FY19. The company has a strong margin profile due to its critical components offerings, in India as well as globally.

GEPL Capital has given a ‘Subscribe’ rating to Sona BLW IPO. “Considering the significant amount of R&D and existing customer relations we believe the company is well equipped to cater to the fast growing EV powertrain segment, which requires significant technical expertise,” the brokerage said.

Shyam Metalics and Energy The company on Friday said it has collected Rs 270 crore from anchor investors, ahead of its IPO that opens on Monday. Shyam Metalics and Energy informed bourses that it has allocated 88,21,764 equity shares to 21 anchor investors at a price of Rs 306 apiece, aggregating to Rs 269.94 crore.

As many as 12 domestic investors, including four mutual funds, two insurance companies and six Alternate Investment Funds (AIFs), and nine Foreign Portfolio Investors (FPIs) participated in the anchor book. White Oak, Kotak Mutual Fund (MF), L&T MF, Aditya Birla Sun Life Insurance Company, SBI General Insurance Company, Abakkus Growth Fund, Kotak Offshore, GAM UK, Aurgin Master Fund Ltd, IIFL Asia Opportunities Fund and Dovetail are among the anchor investors.

Brokerage Hem Securities has given a ‘Subscribe’ rating on Shyam Metalics and Energy IPO. “We like the financial performance posted by the company with healthy balance sheet status. Efficiency improvements improved productivity and cost rationalisation has enabled the company to deliver consistent and strong financial and operational performance. Also, the company’s plans to strengthen its leading market position in India and achieve better economies of scale by expanding existing manufacturing capacities and setting up additional manufacturing plants is indicating the bright future prospects of the company,” Hem Securities said.

Dodla Dairy The Hyderabad-based company is planning to hit the capital markets on June 16, and has set its price band at Rs 421-428 per share for a Rs 520 crore initial public offer (IPO). The total issue size of the company’s IPO is Rs 520 crore. The issue will close on June 18.

Dodla Dairy IPO offer comprises a fresh issue of up to Rs 50 crore and an offer for sale of up to 1,09,85,444 equity shares by promoters and investors. The offer for sale consists of 92 lakh equity shares by investor TPG Dodla Dairy Holdings, and 4,16,604 equity shares by Dodla Sunil Reddy, 10,41,509 equity shares by Dodla Family Trust, and 3,27,331 equity shares by Dodla Deepa Reddy.

The funds raised through the IPO will be utilised for repaying debts of Rs 32.26 crore availed from ICICI Bank, the Hong Kong and Shanghai Banking Corporation (HSBC) and HDFC Bank, and for capital expenditure requirements of around Rs 7.15 crore.

As of December 31, 2020, the company had a total debt of Rs 87.37 crore comprising term loans, working capital facilities and NCDs.

KIMS Krishna Institute of Medical Sciences has fixed a price band of Rs 815-825 a share for its Rs 2,144-crore IPO, which will open for public subscription on Monday. The three-day initial public offer (IPO) will close on June 18. The IPO comprises a fresh issue of shares aggregating up to Rs 200 crore and an offer for sale of up to 2,35,60,538 equity shares from promoters and existing shareholders.

Investors can bid for a minimum of 18 equity shares and in multiples of 18 shares thereafter.

Commenting on upcoming IPOs, Yash Gupta, Equity Research Associate, Angel Broking said, “Shyam Metalics has been receiving very good response in the grey market. The market expects that around 6-7 new IPOs will be coming in a couple of months with an IPO size of Rs 10,000-Rs 11,000 crore. We expect this will be a very good opportunity for the retail investor to make money due to listing gains in a very short period.”