5 Big IPOs Coming Up in March 2023. More Details Inside...

If you go back two years to 2021, the Indian primary market was buzzing with activity. 63 companies raised around Rs 1.2 trillion (tn) via initial public offers (IPOs). In fact, 2021 was the year when Indian primary markets raised the highest-ever funds in a single year.

2022 was in stark contrast to this. In 2022, 40 companies raised Rs 593 billion (bn) from the primary market through IPOs.

After a dull 2022, IPO investors were hoping for a better year in 2023. But the first two months of 2023 gravely disappointed investors as no mainboard IPOs were launched.

During the same period, several SMEs came out with their IPOs and raised funds.

Reportedly, in the past eight months, 33 companies with IPO plans worth Rs 493 bn have allowed their regulatory approvals to lapse.

But now, it appears the winds are changing gradually. The long pause is about to end. Divgi Torq Transfer Systems will launch its IPO 1 March 2023.

Apart from this, there are many more companies lined up to launch their offers in the month of March 2023.

As per a report by The Economic Times, that was based on information received from bankers, 9 companies may come out with their IPOs in the coming four to six weeks. The report read how these companies are looking to raise over 170 bn from the primary markets.

Let's take a look at the companies one by one.

#1 Mankind Pharma

Mankind Pharma is an Indian multinational pharma company, based in Delhi. The company has products in therapeutic areas ranging from antibiotics to gastrointestinal, cardiovascular, dermal, and erectile dysfunction medications.

Mankind Pharma's Manforce is the largest condom brand in India by market share, while Prega News is the largest-selling pregnancy test kit.

In 2018, The ChrysCapital-backed consortium of GIC of Singapore and CPP Investments bought a 10% stake in Mankind Prior to this in 2015, Capital International had bought an 11% stake.

The company filed its draft red herring prospectus (DRHP) in September 2022. According to the draft prospectus, the offer will be a complete offer for-sale IPO. This IPO may be one of the biggest pharma IPOs in India.

Reportedly, Mankind Pharma will float its IPO towards the end of March 2023.

The pharma company has given satisfactory financial performance in the past five years. During pandemic, the pharma company's revenues were hit which is a surprise because pharma stocks were the biggest gainers of the Covid-19 rally. However, on a compounded annual growth rate (CAGR) basis, its sales have gone up by 12.2% in the past five years.

Mankind Pharma Financial Performance (2018-2022)

Particulars (Rs in m)	FY18	FY19	FY20	FY21	FY22
Total Income	50,212.90	50,328.90	59,756.50	63,853.80	79,775.80
Growth	11.80%	0.20%	18.70%	6.90%	24.90%
Operating profit	10,879.80	9,779.40	15,485.00	18,,200.6	21,865.70
Operating profit margin	21.70%	19.40%	25.90%	28.50%	27.40%
Net profit	6,879.00	6,005.40	10,446.10	12,930.30	14,529.60
Net profit margin	13.70%	11.90%	17.50%	20.20%	18.20%

Data Source: Ace Equity

#2 TVS Supply Chain Solutions

TVS Supply Chain Solutions (TVS SCS) is an Indian multinational transportation, logistics and warehousing company. It provides supply chain management services to customers in the automotive, consumer goods, defence and utility sectors in India, the United Kingdom, Europe and the US.

It is part of the TVS Group of companies.

The company's major UK customers include Isuzu, Daimler Trucks and Dennis Eagle in the automotive sector; the Ministry of Defence in the defence sector; and Network Rail, Electricity North West and United Utilities in the utility sector.

In October 2021, TVS SCS raised Rs 5.9 bn from a fund managed by Europe-based diversified holding company Exor, for its future growth and transformational initiatives.

The company filed its DRHP in February 2022. According to the draft prospectus, the IPO consists of a fresh issue of shares worth Rs 20 bn and an offer-for-sale of up to 59.5 m shares.

Reportedly, TVC Supply Chain IPO may hit the market in the next four to six weeks.

The company's sales were rising at a steady pace until Covid-19. The financial year 2019-20 and 2020-21 were bad for the company. Not only did the company lose revenue but it also reported losses in the said period.

However, sales saw a sharp jump of 32.9% in the financial year 2021-22.

The company's net profit margins are a sign of major worry. In 4 out of the past five years, it has reported losses.

TVS Supply Chain Financial Performance (2018-2022)

Particulars (Rs in m)	FY18	FY19	FY20	FY21	FY22
Total Income	54,816.10	68,337.50	67,927.60	69,996.90	92,999.40
Growth	8.50%	24.70%	-0.60%	3.00%	32.90%
Operating profit	2,477.70	5,631.80	4,372.30	4,596.10	6,675.10
Operating profit margin	4.50%	8.20%	6.40%	6.60%	7.20%
Net profit	535.6	-325.6	-2,480.30	-739	-448.8
Net profit margin	1.00%	-0.50%	-3.70%	-1.10%	-0.50%

Data Source: Ace Equity

The company filed an addendum to the draft prospectus in November 2022, to say that it has finally turned profitable.

In the first six months of the current financial year, its revenue jumped 27.8% to Rs 54.2 bn from which it earned a net profit of Rs 380.5 m against a loss of Rs 578 m in the year-ago period.

#3 Avalon Technologies

Avalon Technologies is a multi-faceted manufacturing company. It specializes in PCBA design and assembly, wire harnesses, magnetics, electro-mechanical integration, sheet metal fabrication, machining, and injection moulded plastics.

The company filed its DRHP in August 2022. According to the draft prospects, the IPO will comprise an issue of fresh equity shares worth Rs 4,000 m and an offer for sale (OFS) for Rs 6,250 m.

The funds raised from the fresh issue of the share will be used to repay loans, fund working capital requirements and for other corporate purposes. Avalon Technologies said they would have more clarity on the issue's timeline in the next 10 days.

The company has given steady financial performance in the past three years. Its financial statements were not impacted during the Covid-19 period. In the past three years, its sales grew at a CAGR of 14.2%.

Profits also saw a sharp growth and rose by 135.2% in the past three years.

Avalon Technologies Financial Performance (2020-2022)

Particulars (Rs in m)	FY20	FY21	FY22
Total Income	6,531.50	6,966.80	8,516.50
Growth	NA	7%	22%
Operating profit	757.6	715.7	1,084.80
Operating profit margin	11.60%	10.30%	12.70%
Net profit	123.3	230.8	681.6
Net profit margin	1.90%	3.30%	8.00%

Data Source: Ace Equity

#4 Signatureglobal (India)

Incorporated in 2000, Signatureglobal (India) is a real estate development company. It operates in Delhi NCR and is focused on offering affordable and mid-segment housing in terms of units supplied.

Signatureglobal (India) focuses on central and state government policies supporting affordable housing. It builds houses under policies like Affordable Housing Policy, 2013, Affordable Plotted Housing Policy or the Deen Dayal Jan Awas Yojana (DDJAY - APHP), and so on.

In May 2022, the company raised Rs 4 bn from HDFC Capital.

The company filed a DRHP in July 2022 and received approval for the same in November 2022. As per the DRHP, the IPO will comprise a fresh issue of equity shares worth up to Rs 7,500 m and an OFS of up to Rs 2,500 m.

Promoter Sarvpriya Securities and investor International Finance Corporation will sell equity shares worth up to Rs 1,250 m each.

The company proposes to utilise the net proceeds from the fresh issue towards payment of the debt, inorganic growth through land acquisitions and general corporate purposes.

All real estate companies suffered in 2020 initially when operations came to a halt. Signatureglobal India's revenues dropped 41% in the said year.

After that, the company saw a speedy recovery in the next financial year and its revenue rose by 507%.

Despite a sharp jump in its revenues, the company reported losses.

Signatureglobal (India) Financial Performance (2020-2022)

Particulars (Rs in m)	FY20	FY21	FY22
Total Income	2,630.30	1,547.20	9,396.00
Growth	NA	-41%	507%
Operating profit	-150.7	-87.2	-461.3
Operating profit margin	-5.70%	-5.60%	-4.90%
Net profit	-570.3	-862.5	-1,155.00
Net profit margin	-21.70%	-55.70%	-12.30%

Data Source: Ace Equity

#5 Capillary Technologies

Capillary Technologies is a software product company, which provides cloud-based omnichannel customer engagement, eCommerce platform and related services for retailers and brands. It is headquartered in Singapore.

Till 2018, the company had raised more than US$ 100 m in funding, including the last round of funding of US$ 20 m held in 2018.

The company filed its DRHP in December 2021. According to the draft papers, the issue consists of a fresh issue of equity shares aggregating to Rs 2 bn and an OFS of up to Rs 6.5 bn by Capillary Technologies. Promoter are looking to divest stake through IPO.

Capillary Technologies is backed by Warburg Pincus, Sequoia Capital, Avataar Capital, Qualcomm Asia Pacific and Filter Capital and none of them are diluting their stakes in the company via the proposed initial stake sale.

The company, in consultation with the lead bankers to the issue, may consider a further issue of equity shares, including a private placement aggregating up to Rs 400m. According to DRHP if such placement is completed, the fresh issue size will be reduced.

However, no private placement has been made till date.

The net proceeds from the fresh issuance will be utilised for the repayment or prepayment of borrowings, product development, investments in technology, other growth initiatives, strategic investments and general corporate purposes.

For the financial year 2022, the company reported total sales of Rs 2,244.4 m. The net loss for the said period was Rs 1,008.4 m.

Capillary Technologies Financial Performance (2021-2022)

Particulars (Rs in m)	FY21	FY22
Total Income	1,810.20	2,244.40
Growth	NA	24%
Operating profit	-25	-496.8
Operating profit margin	-1.40%	-22.10%
Net profit	-228.3	-1,008.40
Net profit margin	-12.60%	-44.90%

Data Source: Ace Equity

Investment takeaway

Investors are looking for better avenues to put their money to use in light of changing circumstances. For instance, they are opting for high dividend paying stocks and stocks which offer high yields as the dividend season is soon approaching.

Similarly, once many IPOs hit the market in the month of March 2023, investors may dive into fundamentally strong ones. At least the ones which are profit making...

Warren Buffett once said,

• "An IPO is like a negotiated transaction - the seller chooses when to come public - and it's unlikely to be a time that's favourable to you."

Sometimes, what may happen is instead of hoping for listing gains, investors may end up paying a premium at the time of IPO.

So carefully align your investment horizon and goals with the IPO's risk and rewards before making any investment decision.

For more on IPOs, watch the video below. Richa Agarwal explains what to look for in a winning IPO.

Stay tuned to get further updates on this IPO and all upcoming IPOs in the market.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...