Rs 2,207 Crore Worth IPO To Open On November 22; Fedbank, Gandhar Oil, Flair Writing, Rockingdeals; Subscribe?

The IPO market is having a busy week, with five companies ready to launch their IPO on November 22. These would be Rockingdeals Circular Economy, Flair Writing Industries, Fedbank Financial Services, and Gandhar Oil Refinery India. While Tata Tech is among the most-awaited public offer, let's talk about the other four who together are planning to raise to Rs 2,206.95 crore. These IPOs will close on November 24th.

Among the four IPOs, 3 will be listed on both BSE and NSE, while 1 IPO which is of Rockingdeals will be listed on NSE Emerge. Bidding for anchor investors in these IPOs open on November 21.

Here's what you need to know about the other four IPOs and whether investors should subscribe or not:

Gandhar Oil Refinery India:

Gandhar Oil is planning to raise to Rs 500.69 crore from its initial public offer. The company fixed price bands in the range of Rs 160 to Rs 169 per share.

The IPO comprised of Rs 302 million fresh issue and offer for sale of up to 11,756,910 equity shares amounting to Rs 198.69 crore.

The Company intends to use the proceeds of the Fresh Issue for (i) investment in Texol by way of a loan for financing the repayment/pre-payment of a loan facility availed by Texol from the Bank of Baroda; (ii) capital expenditure through purchase of equipment and civil work required for expansion in capacity of automotive oil at the Company's Silvassa Plant; (iii) funding the Company's working capital requirement; (iv) and general corporate purposes.

Prathamesh Masdekar, Research Analyst, StoxBox for the IPO said, "Gandhar Oil Refinery India Ltd. is the leading manufacturer of white oils in India and has registered the highest revenue CAGR amongst selected specialty oil peers and the second-highest CAGR growth among specialty chemical chosen peers during FY21-23 period. The company has a comprehensive customer and supplier base, with a higher percentage of customers placing repeat orders due to its large product portfolio and customization."

Masdekar added, "The company has posted strong financial performance in the past and is likely to sustain going forward due to its focus on expanding its product portfolio and growing overseas business. With the issue fairly valued at a P/E of 7.1x on the upper price band based on FY23 earnings, we recommend investors to subscribe to the issue from a medium to long-term perspective."

Fedbank Financial Services:

Fedbank plans to raise to Rs 1,092.26 crore through the issue. The NBFC's IPO comprised fresh issues worth Rs 600.77 crore and OFS of 3.51 crore equity shares aggregating to Rs 492.26 crore.

The price band for the IPO is fixed at Rs 133 to Rs 140 per share. The bid lot size is 107 shares and multiples of it thereon.

On Fedbank, Shreyansh Shah, Research Analyst, StoxBox said, "Fedbank Financial Services Ltd. (FSSL) has logged the third fastest AUM growth amongst NBFC peer set in India, with a three-year CAGR of 33% during FY20-23 period. FFSL has also marked steady growth in its top and bottom lines for FY21-23."

Moreover, Shah added, "The NBFC has an effective underwriting capability due to its experienced underwriting team and established processes which are likely to keep asset quality issues at bay going forward. On the valuation front, the issue is valued at a P/BV of 3.3x on the upper price band based on the FY23 book value. With most of the positives seemingly priced in, we advise investors to subscribe to the issue for the benefit of listing gains."

Flair Writing:

Flair aims to raise to Rs 593 crore -- comprising of Rs 292 crore fresh issue and Rs 301 crore offer for sale. The Price Band of the Offer has been fixed at ₹ 288 to ₹304 per Equity Share. Bids can be made for a minimum of 49 Equity Shares and in multiples of 49 Equity Shares thereafter.

The Company proposes to utilize net proceeds from the fresh issue towards (a) Setting up a new manufacturing facility for writing instruments in District Valsad, Gujarat - estimated amount is Rs 55.99 crore, (b) Funding capital expenditure of the Company and Flair Writing Equipments ("FWEPL"), one of its Subsidiaries - estimated amount Rs 86.75 crore, (c) Funding working capital requirements of the Company and its Subsidiaries, FWEPL and Flair Cyrosil Industries ("FCIPL") - estimated amount of Rs 77.00 crore, (d) Repayment/pre-payment, in part or full, of certain borrowings availed by the Company and its Subsidiaries, FWEPL and FCIPL - estimated up to Rs 43 crore, and balance amount will be utilized towards general corporate purpose.

In the case of Flair, Dhruv Mudaraddi, Research Analyst, Stoxbox said, "Flair Writing Industries Ltd. has exhibited a commendable track record of robust financial performance, showcasing impressive growth across key financial metrics from FY21 to FY23. Flair leverages its deep insights into the writing products business, coupled with a diversified product range in a segment characterized by perennial demand. The scale advantage allows the company to maintain cost competitiveness, further solidifying its market position."

Mudaraddi added, "As a stationery entity, the net profit margin exceeding 10% underscores the company's sound financial health. The RoE surpassing 31.2% in the latest year is indicative of efficient capital utilization and a robust asset turnover ratio of 1.5x implies above-average asset efficiency. On the valuation front, the issue is attractively priced at a P/E ratio of 24x which becomes compelling under the assumption of sustained profit growth and when factoring in the intrinsic value of the brand and premium valuation of the FMCG space."

In summation, he said, "Flair Writing Industries Ltd. emerges as a relatively secure investment opportunity and we advise investors to subscribe to the issue with a medium to long-term horizon."

4. Rockingdeals Circular Economy:

The dedicated B2B sourcing platform is looking to raise approximately Rs. 21 crore (on the upper price band) from the issue and aims to be listed with NSE Emerge. The price range for the issue has been fixed at Rs 136 - Rs. 140 per share. Corporate Capital Ventures Private Limited is the Book Running Lead Manager for the Issue.

The IPO will comprise a fresh issue of 15 lakh Equity Shares with a face value of Rs 10/- through the book-building route. 7 lakh shares have been reserved for Anchor and QIB portion, while the HNI portion is 2.15 lakh equity shares and the Retail portion accounts for 5 lakh shares. RDCEL plans to utilise proceeds from the issue towards working capital requirements, brand positioning, marketing and advertising, and general corporate purposes.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.