The SEBI headquarters in Mumbai reflects a set of other new banks in suburban Mumbai which houses major banks and financial instituitioins. (Photographer: Santosh Verma)

11 Companies Approach SEBI With IPO Proposals Worth Rs 7,000 Crore

As many as 11 firms, including AGS Transact Technologies and ASK Investment Managers, have approached the capital market regulator in August to raise over Rs 7,000 crore through initial public offerings largely to fund their expansion projects and working capital requirement.

Studds Accessories, Senco Gold, Harsha Engineers, Mrs Bectors Food Specialities, Sansera Engineering, NDairyihilent, Dodla and Shyam Metalics and Energy and Xelpmoc Design and Tech are the other companies that have filed preliminary papers with the Securities and Exchange Board of India.

Together, these companies are estimated to collect over Rs 7,200 crore through IPOs, merchant banking sources said. Equity shares of these firms are proposed to be listed on the BSE and the National Stock Exchange.

Most of the funds raised through the IPOs will be used for expansion plans, repayment of loans and to support working capital requirement, according to the draft papers filed by the respective companies with SEBI.

Some of the companies said the listing of equity shares on the bourses will enhance their brand name and provide liquidity to existing shareholders. Further, some of them are taking the IPO route to provide exit to their existing shareholders like private equity and venture capital firms.

The IPO market has seen heavy activity so far this year as 21 companies have mopped-up close to Rs 28,000 crore through initial share sale.

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“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 (investment banking) at Prabhudas Lilladher, said.

Experts said a proactive regulatory environment, coupled with uplifted investor sentiment, has helped the IPO market.

SEBI, in its board meeting in June, decided to reduce the timeline for announcement of initial share sale price band, which is further going to aid the IPO market. Under the new rules, the timeline for announcing the price band for an initial share sale offer will be reduced to two days from five days.

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The year 2017 saw 36 companies collectively raising a record of over Rs 67,000 crore through their initial share sales. The previous high being in 2010 when Rs 37,535 crore was garnered.