They include Krsnaa Diagnostics, Devyani International, Exxaro Tiles and Windlas Biotech, which are going to raise close to Rs 3,614 crore between August 4 and 6.
Companies are rushing to the primary market to make best of the excessive liquidity and investor optimism. But with four issues opening on the same day, investors who have limited capital to deploy, are in a dilemma as to what to pick and what not.
Arijit Malakar, Head of Research (Retail) at Ashika Stock Broking, said investors should ride the ongoing momentum in the primary market as the buoyancy is likely continue.
“From a long-term investment perspective, pick strong companies with business moat and the promoter’s pedigree,” he added.
Echoing the similar views, Astha Jain of Hem Securities said: “One should look for the fundamentally strong companies with reasonable valuations, which have left something on the table for investors.”
Among the four, Devyani International is the largest issue, eyeing to mop up Rs 1,838 crore in the price band of Rs 86-90. Krsnaa Diagnostics aims to raise over Rs 1,213 crore in a price band of Rs 933-954.
Windlas Biotech (Rs 402 crore) and Exxaro Tiles (Rs 161 crore) are comparatively smaller issues. The former will sell its shares in the Rs 448-460 price range, while the latter will sell its equity at Rs 118-120 apiece.
There has been a strong momentum in the primary market and all four issues are expected to witness solid interest from investors, said market watchers.
Hem Securities has not come out with any report on Devyani International. It has picked Krsnaa Diagnostics, Windlas Biotech and Exxaro Tiles in that order.
Malakar of Ashika Stock Broking said Devyani International and Windlass Biotech are his preferred picks among the four.
Devyani International boasts of a superb franchise network of KFC, Pizza Hut and Costa Coffee and there is huge growth opportunity in the Indian QSR segment, he said.
“Windlass Biotech is a domestic focused formulation and CDMO player. It is among the top five players in domestic formulation and CDMO in India in terms of revenue,” he said
After a strong run in the first seven months of 2021, analysts expect that the Indian primary market to see continued action in the rest of the year.
But they have word of caution for the investors.
One could apply for all the four upcoming IPOs for listing gains, says Malakar. “The success of recent issues shows there is huge appetite for IPOs among investors and there is abundant liquidity in the system,” he said.
Liquidity and the number of issues do not matter much, but investors should be mindful of market euphoria while bidding for an issue, said Jain.
Recent debutants like Tatva Chinta Pharma Chem and GR Infraprojects have doubled investors’ wealth on the day of listing. Clean Science and Technology and Zomato, too, rewarded investors handsomely. All the issues were a big hit at the subscription level.
Arun Kejriwal, founder of KRIS Investments, said there is madness in the primary market, built on the hefty premium in the grey market. “Retail investors should treat the current frenzy as a lottery and instantly book listing gains. Do not wait for tomorrow and day after, as there is a risk of getting trapped,” he said.
