IPO Alert: 4 Upcoming SME IPOs to Watch Out This Week

IPO investors were hoping for a better year with more public issues in 2023. So far in 2023, the Indian primary market has seen mixed activity.

In 2023, the mainboard IPO activity has remained quite slow till now. Only 6 companies came out with their offers with a total issue size of Rs 90.2 billion (bn).

During the same period, 48 small & medium enterprises (SMEs) came out with their IPOs and raised a little over Rs 9.5 bn.

SME IPOs capture significant investor attention due to their potential to generate rapid multibagger returns. However, it is crucial to acknowledge that their ascent can be as swift as their descent.

Also, the minimum investment required is not as low as the mainboard IPOs. The segment is comprised of small and medium enterprises which are in their early phase of growth.

Going forward, in 2023, several SME are eyeing to come out with their IPOs. In fact, this week four SME IPOs are opening up for subscription.

Let's take a look at each in detail.

#1 Crayons Advertising

The first on the list is Crayons Advertising.

Incorporated in 1986, Crayons Advertising is an integrated marketing and communications agency.

They offer brand marketing strategy, pragmatic online & offline media planning & buying, cutting-edge digital expertise, on-ground & virtual activation capabilities, and design solutions that help clients in brand building.

These services are offered under various advertisement modes such as newspapers, brochures, magazines, television channels, FM channels, and display of outdoor hoardings, etc.

In the past three years, the company's sales have grown at a CAGR of 6% while net profit has grown by 11%.

The expansion of media and entertainment channels and the advent of subscription-based channel models has boosted the growth in recent years.

Here are the key details of the IPO.

Issue period: 22 May 2023 to 25 May 2023

Type of Issue: Book built issue of 6.4 million (m) shares

Face value: Rs 10 per equity share

Price band: Rs 62 - 65 per share

Lot size: 2,000 shares

Application limit: Maximum one lot worth Rs 130,000

Tentative IPO allotment date: 30 May 2023

Tentative listing date: 2 June 2023

#2 Vasa Denticity

Second on the list is Vasa Denticity.

Incorporated in 2016, Vasa Denticity is in the business of marketing and distributing a comprehensive portfolio of dental products.

The products of the company include consumables, instruments, equipment, and accessories for diagnosing, treating, and preventing dental conditions.

They work on improving the aesthetics of the human smile through their online portal Dentalkart.com.

Over the last three years, the company's profitability has seen a sharp rise. On a CAGR basis in the last three years, profit has gone up by 286%.

The sector-specific experience and expertise of the company's promoters have contributed significantly to the growth.

Here are the key details of the IPO.

Issue period: 23 May 2023 to 25 May 2023

Type of Issue: Book built issue of 4.2 m shares

Face value: Rs 10 per equity share

Price band: Rs 121 - 128 per share

Lot size: 1,000 shares

Application limit: Maximum one lot worth Rs 128,000

Tentative IPO allotment date: 30 May 2023

Tentative listing date: 2 June 2023

#3 Hemant Surgical Industries

Third, on the list is Hemant Surgical Instruments.

Incorporated in 1989, Hemant Surgical Industries is engaged in the business of manufacturing, importing, and assembling, and they market a comprehensive portfolio of medical equipment and disposables.

The wide spectrum of equipment and disposables offered by the company includes:

• Renal care
• Cardiovascular disease
• Respiratory disease
• Critical care and radiology
• Surgical disposables

The products processed in the assembly units of the company are imported from countries like Japan, China, France, and Australia.

On a CAGR basis in the last three years, the company's sales and profit have increased by 23% and 88%, respectively.

The growth was driven by steady market demand.

Here are the key details of the IPO.

Issue period: 24 May 2023 to 26 May 2023

Type of Issue: Book built issue of 2.7 m shares

Face value: Rs 10 per equity share

Price band: Rs 85 - 90 per share

Lot size: 1,600 shares

Application limit: Maximum one lot worth Rs 144,000

Tentative IPO allotment date: 31 May 2023

Tentative listing date: 5 June 2023

#4 Proventus Agrocom

Incorporated in 2015, Proventus Agrochem is an integrated health food brand.

The company has its presence in the entire range of dry fruits, nuts, seeds, and berries. The products of the company also include various healthy snacking products across the value chain.

The company sells its brands under ProV. It focuses on three essential pillars of success - quality produce, a farm-to-table approach, and a multitude of convenient choices for consumers.

Here are the key details of the IPO.

Issue period: 24 May 2023 to 26 May 2023

Type of Issue: Book built issue of 0.9 m shares

Face value: Rs 10 per equity share

Price band: Rs 771 per share

Lot size: 160 shares

Application limit: Maximum one lot worth Rs 123,360

Tentative IPO allotment date: 31 May 2023

Tentative listing date: 5 June 2023

A word of caution

The SME exchange is a relatively recent phenomenon. The BSE SME platform started in March 2012 while the NSE SME IPO platform started later the same year.

Unlike mainline IPOs that are vetted by the market regulator, SME IPOs are managed by exchanges.

While some SME IPOs have experienced massive gains, investors must be cautious and conduct thorough research before investing.

SME IPOs stand at an intersection of high risk and rewards. Hence, an investor must carefully think about his investment horizon and risk appetite before investing in SME IPOs.

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...