The IPO hype is inexorable, with a plethora of mainboard IPOs from all industries hitting the D-Street each month, much like the domestic benchmark indices, which are relentlessly setting new records. Two very distinct mainboard IPOs have been welcomed throughout the first week of July, and they are set to conclude today. Due to strong interest from retail and non-institutional investors, both IPOs were completely booked on the first day of the last two days of bidding.
Talking about the issues, Bansal Wire Industries IPO is a fresh equity share offering valued at ₹745 crore that does not include an offer-for-sale (OFS) component. The price range for each share of the offering is ₹243–256. The money will be utilised for normal business operations, debt repayment, and meeting the company's working capital needs. Bansal Wire Industries is involved in the production and export of steel wire. Its three primary business categories are stainless steel wire, mild steel wire (low carbon steel wire), and high carbon steel wire. Bansal Wire Industries IPO subscription status was 5.73 times on the second bidding date.
In contrast, the Emcure Pharmaceuticals IPO consists of a new issue of equity shares valued at ₹800 crore and an offer of sale (OFS) by promoters and current shareholders for 1.14 crore equity shares, valued at ₹1,152 crore, at the top end of the price range.
The public issuetotals ₹1,952 crore as a result of this. Those selling shares in the OFS include investor and promoter Satish Mehta as well as BC Investments IV Ltd., a division of US-based private equity behemoth Bain Capital. Repayment of debt and normal business activities will be funded by the proceeds of the new issuance. The issue's price band has been fixed in the range of ₹960 to ₹1,008 per share. Emcure Pharma IPO subscription status was 4.98 times on the second day of bidding.
Investors who would want to apply on this final day of bidding and would like some additional insight can see what the market experts are saying about both IPOs.
Kejriwal explained that one is a small issue, and the other is three times larger. From an allotment perspective, the possibility of getting shares in the larger one is much better than the small one. So if you want allotment, you stand a better chance in the pharma company. As far as prospects are concerned, pharma is a tried and tested business, and it is also defensive. Bansal Wire Industries is going in for an expansion, which will drive the growth, but the benefit of the expansion is still 6–8 months away. So while there is a listing benefit to both, one would make more money if one held Bansal Industries. So maybe when posting-listing euphoria gets over, one could re-enter Bansal Wire Industries at a later date and make money if you held it for a year.
“Pharma is plain and simple. One needs to compare it with its peer group and decide what one wants to do. The biggest driver for Emcure Pharma is the fact that it is almost ₹2,000 crore, and one gets a better chance of allotment at this point in time,” explained Arun.
According to Tapse, valuations are fairly priced. Both companies have something on the table for fresh investors, with listing gains coming via IPO. The long-term growth story is visible in both business models.
Both companies are reducing debt from IPO proceeds, reducing their financial burden, and equally increasing their bottom line.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
