After the stellar listing of Rossari Biotech and the latest being of Happiest Minds, there is again 3 public issues lined up for this week. And with stock markets having rebounded sharply from the March lows,
The 3 IPOs to open are CAMS, Chemcon Speciality Chemicals and Angel Broking that would together aim at raising a sum of Rs. 3160 crore.
Now here we lists out experts take on all the 3 IPOs and which one should you invest in using your surplus cash:
1. CAMS or Computer Age Management Services:
It is completely an OFS of 1.82 crore shares by NSE with no fresh equity issuance. Other promoter that will offload its stake to the tune of 31% is Great Terrain but it shall be not be part of the IPO. For the retail investor, minimum bid size for the IPO is 12 share price and the price band has been fixed at Rs. 1229-1230 per share.
The company primarily is a mutual fund transfer agent based out of Chennai and shares a market share of as much as 70%.
Financials: Over the FY17 to FY20, the company's revenue/EBITDA/PAT registered a growth or CAGR of 14%, 13% and 12%, respectively. "The balance sheet is lean with zero debt and negative working capital, thus resulting in healthy return ratios." it said.
Whether or not you should subscribe to the CAMS Issue?
The products and services of the company are based on the fortune of the country's mutual fund industry and with a vast market still to tap, the future of the company is bright. Several brokerages advice a 'subscribe' to the issue considering its healthy and integrated business modes, strong financials and presence across the country. Also, subscribers can bet on the issue with a long term view.
2. Chemcon Chemicals
The public issue of Chemcon Chemicals Speciality also opens today and comprises an OFS of Rs. 153 crore and fresh equity issuance worth Rs. 165 crore. Price band for the issue has been fixed at Rs. 338- Rs. 340 per share and investors can bid in for a minimum of 44 equity shares.
The mopped capital shall be put for working capital requirement as well as for
expansion of company's business.
In the previous year, the company derived most of its sales from sales of pharma and chemicals products. Apart from speciality chemicals, the company also is into manufacturing of Oil well completion chemicals.
Should you subscribe?
Because of the healthy growth of company's margin, continuing capacity expansion as well as improving outlook, brokerages have given a ‘Subscribe' call on the issue. Nonetheless, Choice Broking has cautioned on the public offer citing corporate governance issue at the company as one of the promoter is facing RBI action as it did not carried out company's operations from the registered office.
3. Angel Broking
This shall be the first issuance by a brokerage in 10 years for mopping up Rs. 600 crore. In the Rs. 300 crore OFS, shares worth Rs. 120 crore will be offloaded by IFC. The bid lot for retail investors will be of 49 equity shares and in multiples thereafter. And ever since the pandemic has struck, the company's client acquisition has been way higher. Also, in the past two years, it has garnered revenue of Rs. 500 crore from its broking business segment.
The last broking firm which debuted on the bourses was ICICI Securities did not saw good response from IPO investors.
Nonetheless, high liquidity as well as the latest discount broking model of the brokerage firm should see this brokerage's IPO sail through easily.
AnandRathi has placed a subscribe call on the issue suggesting that the company's technological adoption has led it to rationalise cost aspect. Also, at the same time it currently offers simplified and competitive pricing to clients together with value added services.
It said the company's brokerage revenue accounted for 69.54 per cent of the total, whereas revenue from lending activities, income from depository operations, portfolio management services, income from distribution, and other activities formed 30.46 per cent of total revenue in FY2020.
"We believe Angel Broking's IPO and OFS is fairly priced at the current price band, considering its financial performance and growth prospects. We recommend a ‘subscribe' rating on the IPO," the brokerage said. Nonetheless it also cautioned that over the 3-years term the company has not been able to boost up its I revenues and profits.
Also, given the past performance of stocks in the broking space, it could be bet upon by investors with high risk appetite. Say for instance, ICICI Securities being the latest to debut in the segment is still trading below its issue price.
So, if you have surplus cash you can try your luck for exorbitant gains via listing in these IPOs, though allotment remains a big question. IPOs provide an oppotunity for our cash to grow exponentially and hence we can make big profits.