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Forthcoming IPOs in 2021 - List of IPOs in 2021

Forthcoming
13/08/2021

The last 2 weeks have been extremely busy on the IPO front. In the previous week, we saw four IPOs - Devyani International, Krsnaa Diagnostics, Exxaro Tiles and Windlas Biotech IPO hitting the market. The current week has again seen 4 IPOs - CarTrade Tech, Nuvoco Vistas, Aptus Value Housing Finance and Chemplast Sanmar IPO collecting close to Rs.15,000 crore. The year 2021 is likely to see more than Rs.60,000 crore collected via IPOs by the end of August and cross the Rs.100,000 crore mark comfortably before the end of the year. Here is a list of IPOs slated to hit the market in the near future.

 

The focus is on IPOs above Rs.1,000 crore in terms of size.

Forthcoming IPO list: 

Name of Company

Indicative IPO size

Business description

One97 Communications (Paytm IPO)

Rs.16,600 crore

Digital payment platform

HDB Financial Services

Rs.10,000 crore

Financial Services arm of HDFC Bank

Policybazaar

Rs.6,500 crore

Online Insurance buying platform

Bajaj Energy

Rs,5,450 crore

Alternate Energy company

PharmEasy

Rs.3,700 crore

Digital medicine procurement

Go Air IPO

Rs.3,600 crore

Operator of Go Air Airlines

Aditya Birla Sun Life AMC IPO

Rs.2,000 crore

Mutual Fund AMC of Birla Group

SAMHI Hotels IPO

Rs.2,000 crore

Hotels and hospitality industry

MobiKwik

Rs.1,900 crore

Online digital and lending platform

Arohan Financial Services IPO

Rs.1,800 crore

Microfinance institutions out of Kolkata

Penna Cement

Rs.1,500 crore

Cement manufacturer

Utkarsh Small Finance Bank IPO

Rs.1,350 crore

Small Finance Bank

Fincare Small Finance Bank IPO

Rs.1,330 crore

Small Finance Bank

Shriram Properties IPO

Rs.1,250 crore

Property development

Supriya Lifesciences IPO

Rs.1,200 crore

Pharmaceuticals business

SREI Equipment Finance

Rs.1,100 crore

Finance and Leasing

 

Check:

1. Upcoming IPOs in 2021

2. List of Upcoming IPOs in October 2021

 

This is a sample list. There are other mega IPOs like the Rs.4,500 crore Adani Wilmar IPO and the Rs.4,000 crore Nykaa IPO lined up. We have not yet included the Rs.70,000 crore IPO of LIC, which is most likely to happen in the first quarter of 2022. IPOs are surely promising exciting times ahead.

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How to Use a Lumpsum Calculator for Mutual Funds

Lumpsum Calculator
13/08/2021

Financial calculators are an important tool of financial planning. One of the most popular calculators in personal finance planning is the lumpsum calculator. You can understand the lumpsum calculator in terms of two applications.


•    Lumpsum calculator can be used to determine, how much a fixed corpus invested today would be worth after a certain number of years and assuming a certain CAGR returns over this period.

•    The other application of the lumpsum calculator is actually to look at the above situation in reverse. In practice, we need to know how much corpus we need today to meet our future goals. Lumpsum calculator can be use for goal planning also.

Lumpsum calculator and how much your money will grow

The table captures how much a fixed corpus of Rs.500,000 today will grow at the end of different time periods. The MF portfolio is expected to appreciate at 14% CAGR.
 

At the end of X Years

Corpus of

Will grow to

5 years

Rs.500,000

Rs.962,707

10 years

Rs.500,000

Rs.18,53,651

15 years

Rs.500,000

Rs.35,68,969

20 years

Rs.500,000

Rs.68,71,745

25 years

Rs.500,000

Rs.1,32,30,958

 

The lumpsum calculator clearly shows how a fixed corpus grows on its own over different periods of time. Clearly, the longer you hold, the better it is.

Lumpsum calculator for goal planning

A more practical way is to use a lumpsum calculator for goal planning. For example, if you target to reach a corpus of Rs.1 crore after 20 years in mutual funds at a CAGR of 14%, what would be the initial investment requirement. Here again, the lumpsum calculator can show you how much you need to start off with today.

 

Also Read: SIP Calculation: How to Make Rs. 1 Crore for Retirement

 

For example, if you want to reach a target of Rs.1 crore, as in the above case, you must start off with a corpus of Rs.727,617 and invest it in mutual funds with CAGR potential of 14% annualized and hold on for 20 years. The lumpsum calculator provides financial planning analytics both ways.
 

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Merit in Buying Digital Gold - How to buy Digital Gold

Digital Gold
13/08/2021

Gold prices have moved lower on prospects of sharp GDP growth, which takes away the safe haven preference. The same is the case with silver, although demand patters are largely industrial.  In the last couple of years, Indian investors realized the merits of having gold in the portfolio as a defensive strategy. However, there is still confusion on how to buy Digital Gold.

The simplest way is to buy gold jewellery or gold coins. But storage is a big worry here and physical charges can also be high. The other 3 options are Sovereign gold bonds, Gold ETFs and Digital gold. Here is what investors need to know about the power of digital gold. Remember, digital gold is a safe and secure way of holding gold in digital fractions with seamless transaction processing. 

Digital gold brings some key advantages

Here is the digital gold edge for investors.

•    It is convenient to buy and sell digital gold. If you have a 5paisa  Demat Account, you just need to log-in to buy/sell digital gold. There is no size restriction, in that you can even buy 0.35 grams of gold, unlike the sovereign gold bonds and gold ETFs.

•    Digital gold is affordable. Firstly, it allows buying fractional gold of as low as 10 grams. Digital gold also works out cost-effective as there are no making charges involved. 

•    Unlike buying gold from jewelers, you don’t worry about gold purity. All the gold is certified by an official accredited agency as being 24-carat gold with 995 purity.

•    Digital gold is very liquid. You can log into your 5paisa account and buy or digital gold at any point of time. There are virtually no restrictions on buying and redemption.

•    Finally,  you may wonder as to where is the gold backing digital gold? The assurance is that digital gold is stored in segregated and guarded vaults. In short, digital gold can be converted to physical gold at any time subject to charges.

 

Also Read: Basics you need to know before Investing in Sovereign Gold Bonds

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This Independence Day Take Oath to Become Financially Independent

Financially Independent
by Mrinmai Shinde 13/08/2021

Becoming financially independent is usually in our priority list, but sometimes while taking the life as it comes, we tend to make some financial mistakes that deviate us away from this ultimate goal of ours. We might have several other financial goals, but while chasing them we need to ensure that we do not compromise on this one as it is the one that might help us during our downtime. Financial Independence is not just paying your billing, buying a home and settling down in life, it means creating a stream of income that works for you when you are in your downtime. It’s about making your money work when you can’t to have a reliable cushioning that would allow you to retire early, in case you need that or support you during your downtime. 

On this Independence Day, we thought of coming with a blog that can be used as a checklist for you to identify how close you are to becoming financially independent and what steps you need to take to ensure you achieve this goal.

Here, are some of the popular investment options in India:
 

Investment

Interest/ Returns

Lock-in Period

Risk

Direct Equity

NA

NA

High

Mutual Funds

Market Linked

ELSS lock-in period 3 years, Close-ended mutual funds are always with a lock-in period

Low-High

National Pension Scheme

Market Linked

60 years

Low- High

Gold ETF

Market Linked

NA

Low-Medium

Public Provident Fund

currently 7.1% p.a.

15 Years

Low

Bank Fixed Deposit

4-6% p.a.

Depends on Bank

Low

Real Estate/Property

historical 8%-12% per year

NA

Moderate

Unit Linked Investment Plan

Depending on the investors profile

5 years

High

National Savings

Certificate

currently 6.8%  p.a.

5 years

Low

Senior Citizen Savings Scheme

7.4% p.a. (Q1 FY21-22)

5 years

Low

 

Stocks or Direct Equity Investment:

Direct equity is one of the popular investment instruments in India. Although, it is considered as the most riskier investment option but rewards are also generally high than any other investment option in the long run. When investing in direct equities or stocks, it is wise to consider certain aspects like selecting the right stock for investment, entry and exit timing in the market. Additionally, one should also study the fundamentals of the company. It is essential to have a Demat account to invest in direct equities.

Mutual Funds:

Mutual funds are the most preferred investment option. Mutual funds investment invest money in several financial instruments like debt, equity, money market funds, etc. The returns depend on the market performance of the funds. The two major categories of investment options offered by mutual funds are equity mutual funds and debt mutual funds.

Equity mutual funds invest in shares of companies with different market capitalization. Generally, a fund investing 65% of their money in equity or equity-related securities is categorized as an equity mutual fund. Equity mutual funds are the riskiest class of mutual funds, and hence, they can generate higher returns than debt funds.

Whereas, debt fund invests in fixed return instruments like corporate bonds, government securities, treasury bills etc. Debt funds generally offer safe and steady returns.

National Pension Scheme (NPS):

Under NPS, individual savings are pooled into a pension fund which is invested by PFRDA regulated professional fund managers as per the approved investment guidelines in the diversified portfolios comprising of Corporate Debentures, Shares, Government Bonds and Bills.

Auto and Active are the two investment options offered by the NPS. In auto option funds are automatically invested in different assets. Whereas, the active option allows the investor to invest in assets of their choice. It enjoys tax benefits under Section 80C and Section 80CCD.

 

Gold ETF:

Gold ETFs are open-ended mutual fund schemes that will invest the money in standard gold bullion (gold with 99.5% purity). An investor holds units of an ETF whose value depends on the price of the physical gold in the market. Buying/ selling of gold ETF is easier than physical gold as it is traded on the stock exchanges.  An investor requires a Demat account

Also Read: How to buy Digital Gold

 

Public Provident Fund (PPF):

PPF is more like a fixed deposit scheme where an investor invests at regular intervals for a long period to fund his retirement years. PPF scheme is backed by the Government. PPF has a lock-in period of 15 years. This scheme enjoys tax benefit under section 80C of the income tax act 1961 with a maximum tax benefit of Rs 1.5 lakhs p.a.

Also Read: 5 changes in the new PPF scheme you should know 

 

Bank Fixed Deposit:

Fixed deposits are one of the safest and well-known investment options in India. Bank fixed deposit offers interest rate higher than the bank savings account. Bank FDs are considered safe as it generally offers fixed return for a fixed tenure and there are negligible chances of fraud.

 

Real Estate Investment/Property:

Real Estate is one of the fastest-growing investment options. The risk is low as real estate prices are generally not highly volatile. It works as an asset and can be treated as one of the best investment options for the long term.

 

Unit Linked Investment Plan (ULIP):

ULIP offers twin benefits of insurance and investment. It also offers tax benefits. It has a lock-in period of 5years. Under ULIP, a part of the premium is used for insurance coverage while the remaining premium is invested in market-linked instruments such as shares, bonds etc. This scheme enjoys tax benefit under section 80C of the income tax act with a maximum tax benefit of Rs 1.5 lakhs p.a.

 

National Savings Certificate and Senior Citizen Savings Scheme: 

The National Savings Certificate (NSC) is a fixed income investment scheme that the investor can open with any post office branch. The scheme is a Government of India initiative. NSC has a fixed maturity period of five years. There is no maximum limit on the purchase of NSCs, but only enjoys tax benefit of up to Rs.1.5 lakh under Section 80C of the Income Tax Act.
Senior Citizens’ Savings Scheme (SCSS) is a government-backed retirement savings programme. The maximum amount allowed under the SCSS account is up to Rs.15 lakh. Tax deduction of up to Rs.1.5 lakh under Section 80C of the income tax act.

Also Read: Best Investment Options for Fixed Returns

While working on these investment options, do not miss on taking any misfortunes into consideration as things like health emergencies and medical bills might drain a huge chunk of your finances. Always make sure you have a health insurance and a term insurance in place so that you secure both yourself and your family. 

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LIC may split its proposed IPO into 2 tranches

LIC IPO
13/08/2021

It has been widely reported that LIC may consider splitting its proposed IPO into two tranches. In the recent week, the IPO response was starkly weaker than the previous week since liquidity for most retail and HNI investors was stuck in previous week’s IPOs. This has raised questions about the ability of the market to absorb a massive IPO in one go.

The IPO market has seen solid action in the current fiscal. Between April and July, the IPO markets managed to raise close to Rs.28,000 crore. August alone is expected to raise another Rs.30,000 crore taking the total IPO fund raising to Rs.60,000 crore by end of August. Then there are some mega IPOs lined up like the Rs.16,600 crore Paytm IPO, Rs.6,500 crore Policybazaar, Rs.5,500 crore Bajaj Energy and the Rs.4,000 crore Nykaa IPO. DIPAM is concerned that, in the midst of this deluge, doing the entire LIC IPO in one shot may be tough.

There are two proposals for LIC IPO that the government is mulling. Firstly, there is a proposal to split the IPO into two tranches of Rs.35,000-40,000 each and space them with a gap of 2-3 months. The second option is to get the cornerstone or anchor investors to put in large bids ahead of the IPO to enthuse the markets. DIPAM is currently evaluating all possible options. 

Also Read: LIC IPO gets once step closer to becoming reality

LIC IPO does not have to only compete with private names. There is the massive BPCL stake sale, which will also absorb a lot of liquidity from the market. Even the Air India divestment is likely to impact institutional liquidity. The government, obviously, does not want to get into a situation wherein the market is unprepared for an IPO of that size. 

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Ixigo files for its Rs 1,600 crore IPO

Ixigo
13/08/2021

The name Le Travenues Technology may not really ring a bell, but this is the company that operates the highly popular travel platform Ixigo. This week, Ixigo has filed draft red herring prospectus (DRHP) with SEBI for its proposed Rs.1,600 crore IPO. The IPO will consist of a fresh issue of Rs.750 crore and an offer for sale (OFS) for Rs.850 crore. 

The two biggest sellers in the OFS will be Elevation Capital at Rs.550 crore and Micromax Rs.200 crore. In addition, two promotes Alok Bajpai and Rajnish Kumar will sell Rs.50 crore each. Elevation Capital was formerly called SAIF Partners and has $2 billion invested in India. Ixigo is an online travel agency (OTA), driven by artificial intelligence (AI) and machine learning (ML).

The Rs.750 crore fresh issue will be used to bankroll its organic and inorganic growth initiatives. Organic initiatives include discounts and promotional incentives as well as enhanced investments in marketing, distribution and technology infrastructure. Inorganic initiatives, on the other hand, refer to mergers and acquisitions.

Ixigo has some unique records to its credit. Its online train booking platform is the largest B2C distribution platform for IRCTC with 42% market share. Apart from its train focused app, ConfirmTkt, Ixigo also has a bus focused app, AbhiBus. Incidentally, AbhiBus has a 10% market share in bus bookings and is the second largest bus ticketing platform in India. 

In the recent past, Ixigo has clocked some huge numbers. For example, its gross order value (GOV) stands at Rs.2,695 crore for the year. Its app usage at 3.75 crore users is the highest, and its monthly app download of 37.50 lakhs is again a record. For FY21, Ixigo reported revenues of Rs.138 crore and a net profit of Rs.7.53 crore.

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