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Will Puranik Builders be third time lucky as it files for IPO again?

Puranik Builders files for IPO again
by 5paisa Research Team 22/09/2021

Real estate developer Puranik Builders Ltd has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India to raise funds through an initial public offering (IPO).

The IPO comprises a fresh issue of shares worth Rs 510 crore and an offer for sale of up to 9.45 lakh shares by the company’s promoters, according to the DRHP filed with the capital markets regulator.

The offer for sale involves Ravindra Puranik and Gopal Puranik divesting up to 4.725 lakh shares each.

The Mumbai-based developer may also consider a pre-IPO placement to raise as much as Rs 150 crore. If it does so, it will reduce the amount to be raised via the fresh issue of shares in the IPO.

The company plans to use the fresh proceeds to repay loans and for other general corporate purposes.

Elara Capital (India) Pvt. Ltd and YES Securities (India) Ltd are the merchant bankers managing the issue. 

This is the company's third attempt to go public. The company had first approached SEBI for IPO approval in June 2018. It filed its DRHP again in November 2019 and even received regulatory clearance to launch the offering but didn’t follow through with its plans.

Puranik Builders’ business

The company has been operating for three decades. It develops housing projects in the mid-income affordable segment in the Mumbai Metropolitan Region and Pune Metropolitan Region.

As of July 31, 2021, it had developed almost six million square feet of space across 35 completed projects in the two regions.

It also had 23 ongoing projects with an aggregate developable area of 14 million square feet with ticket sizes ranging between Rs 47.3 lakh and 1.25 crore in the MMR and between Rs 34.1 lakh and Rs 97.2 lakh in the PMR for mid-income affordable housing segment. The ticket size ranged from Rs 11.5 lakh to 34.2 lakh for low-income affordable housing segment. 

In addition, it has 17 forthcoming projects with an aggregate estimated developable area of 13.6 million square feet. 

The company develops most of its projects through joint development or joint venture arrangements with land-owners. As of July 31, it had carried out 32 projects on its own and 43 projects through the joint venture model. The company also has a land bank of 70.09 acres.

Puranik Builders’ finances

The company’s total income fell to Rs 513.56 crore for 2020-21 from Rs 730.24 crore and Rs 721.23 crore for the previous two financial years, as sales were affected because of Covid-19 and measures to tackle the pandemic including lockdowns.

“Due to the nationwide lockdown and inability to conduct site visits, sales enquiries from prospective customers that typically follow site visits were significantly affected,” the company said.

Similarly, its net profit for 2020-21 dropped to Rs 36.3 crore from Rs 51.23 crore for 2019-20 and Rs 71.27 crore the year before. 

Earnings before interest, tax, depreciation and amortisation (EBITDA) for 2020-21, 2019-20 and 2018-19 were Rs 164.27 crore, Rs 192.29 crore and Rs 209.26 crore, respectively. The EBITDA margin came in at 32.71%, 26.68% and 29.26% for the last three years. 

For the four months ended July 31, 2021 it clocked a net profit of Rs 17.5 crore and EBITDA of Rs 51.3 crore on total income of Rs 191.13 crore.

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Check out the mid-cap stocks where FIIs have sold shares

Mid-cap stocks where FIIs have sold shares
by 5paisa Research Team 22/09/2021

The Indian stock market’s rapid rise to record highs has made several foreign institutional investors (FIIs) more cautious over the past couple of months. As a result, there has been a rush of money towards large-cap counters as investors look for safer bets rather than chasing the riskier mid- and small-cap stocks.

Indeed, FIIs have dumped a clutch of mid-cap stocks over the last few months. Quarterly shareholding data show they cut their stake in as many as 54 listed companies that currently have a valuation between Rs 5,000 crore and Rs 20,000 crore or are presently included in the mid-cap index.

Also Read : Why did FIIs Invest Rs.16,300 crore in September?

A sector-wise analysis shows such stocks are spread across several industries. However, some sectors like financial services and hospital chains stand out.

Top mid-caps where FIIs cut stake

The largest mid-caps that saw offshore portfolio investors turn particularly bearish during the three months ended June 30 include diagnostics chain Thyrocare, Jubilant Ingrevia, Granules, Escorts, PVR, Hinduja Global, Just Dial, Rain Industries, Easy Trip Planners and Ceat.

In all these mid-cap stocks FIIs cut their holding by 3% or more.

To be sure, FII stake shrank the most in Poonawalla Fincorp (previously Magma Fincorp). Their stake skid 13.5% last quarter, but this had to do with fresh capital infusion by the new promoters rather than any actual selloff.

Interestingly, FIIs’ stake in at least two companies fell just ahead of separate deals where those firms are being acquired by other companies. For instance, Thyrocare is being bought by online medicine delivery company PharmEasy. Similarly, Just Dial is being acquired by Reliance Industries. While the Thyrocare deal was announced in late June, the Just Dial transaction was unveiled in July.

Other mid-caps that saw FIIs slash holding 

FIIs cut their stake by two-three percentage points in around half a dozen mid-caps last quarter. These include gold finance company Manappuram Finance, drugmaker Natco Pharma, diversified financial services firm Edelweiss, Heidelberg Cement, Sunteck Realty, auto component maker Mahindra CIE and CCL Products.

Many mid-caps that command a market value of Rs 10,000 or more also saw FIIs selling less than a 2% stake. These companies include broadcaster Sun TV, Sanofi India, developer Prestige Estates, Apollo Tyres, UTI Asset Management, power utility CESC, Galaxy Surfactants, City Union Bank, Redington, and Mahanagar Gas. 

Hospital chains Aster DM Healthcare and Narayana Hrudayalaya also lost favour among FIIs. Fortis, which now commands a market value just over Rs 20,000 crore assigned for a mid-cap firm, is another top hospital chain that saw FIIs turn bearish on its counter.

Tata Chemicals, L&T Finance, Minda Industries, Happiest Minds Technologies, M&M Financial, Zee Entertainment and Endurance Technologies are other such firms that are still seen as a mid-cap even though their current market cap is above the threshold. These companies, too, reported a fall in their FII shareholding.

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Defence electronics firm Data Patterns files for IPO. Find out more

Defence electronics IPO
by 5paisa Research Team 22/09/2021

Data Patterns (India) Ltd, a Chennai-based supplier of electronic systems to defence and aerospace sectors, has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India to raise funds through an initial public offering (IPO). 

The IPO comprises a fresh issue of shares worth Rs 300 crore and an offer for sale of 60.7 lakh shares by promoter and individual selling shareholders. The OFS includes the sale of up to 19.7 lakh shares each by Srinivasagopalan Rangarajan and Rekha Murthy Rangarajan. Sudhir Nathan, GK Vasundhara and other existing shareholders will sell the remaining shares.

As per market sources, the overall IPO size is expected to be Rs 600-700 crore.

The company plans to use the net proceeds from the fresh issue to repay debt, fund its working capital, and upgrade and expand its existing facilities.

The defence electronics company may also consider a pre-IPO placement aggregating for up to Rs 60 crore. If it does so, it will reduce the amount from the fresh issue, according to the DRHP.

Data Patterns’ IPO comes close on the heels of another defence component supplier hitting the public markets with its IPO. Paras Defence and Space Technologies Ltd’s IPO opened Wednesday and has already been subscribed nearly 40 times with more than a day to go before the bidding closes.

Data Patterns’ business and financials

Data Patterns was founded by Srinivasagopalan Rangarajan and Rekha Murthy Rangarajan. The defence and aerospace electronics systems provider’s core competencies include design and development across electronic hardware, software, firmware, mechanical and product prototype, besides its testing, validation and verification. 

The company’s product portfolio ranges from building blocks to end systems. Its involvement has been found across radars, underwater electronics, communication and other systems, electronic warfare suites, avionics, small satellites, automated test equipment, and programmes catering to Tejas Light Combat Aircraft, the BrahMos missle and other communication and electronic intelligence systems.

Data Patterns had developed the first nano satellite, NiUSAT, which deployed in 2017. Two more satellites are in progress, the company said.

Data Patterns works closely with state-run defence companies such as Hindustan Aeronautics Ltd and Bharat Electronics Ltd as well as government organisations involved in defence and space research like the DRDO. 

The company’s order book has grown at a compound annual pace of 40.72% over the last four years. As on July 31, 2021, it had orders worth Rs 582.30 crore in hand.

For 2020-21, the company’s revenue from operations was at Rs 226.55 crore as against Rs 160.19 crore for the previous year. Net profit jumped to Rs 55.57 crore from Rs 21.05 crore.

Data Patterns is backed by Florintree Capital Partners LLP, an investment firm run by former Blackstone executive Matthew Cyriac. Florintree holds a 12.8% stake in the company.

IIFL Securities Ltd and JM Financial Ltd are the book running lead managers to the issue. 

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Sansera Engineering lists at 9% premium after mixed IPO show

Sansera Engineering IPO
by 5paisa Research Team 23/09/2021

Sansera Engineering Ltd, which makes components for automotive and aerospace companies, made a positive stock market debut on Friday as its shares listed at a 9% premium to its initial public offering (IPO) price.

The company’s shares listed on the BSE at Rs 811.35 apiece, up from the issue price of Rs 744. The shares touched a high of Rs 842 apiece before paring the gains to trade around Rs 829.65 around 10:30 AM.

The company now commands a market valuation of around Rs 4,262 crore. 

The BSE’s 30-stock benchmark was up 0.5% in morning trade and crossed the 60,000-mark.

Sansera is the third company to list on the bourses this month, after the September 14 debut of speciality chemicals maker Ami Organics Ltd and Vijaya Diagnostic Centre Ltd. 

Ami Organics had listed at a 48% premium and while the Hyderabad-based pathology chain’s shares had begun trading at a premium of barely 2%. However, both have charted different paths since then. While Vijaya Diagnostic’s shares are up 9% from the IPO price, shares of Ami Organics have jumped 117% in just eight trading sessions.

Sansera’s debut comes after its IPO received a lukewarm response from retail investors even though the overall issue sailed through easily. The IPO was covered 11.5 times, thanks mainly to strong interest from qualified institutional buyers (QIBs). 

The QIB portion was subscribed 26.5 times, as they bid for more than 9 crore shares. Non-institutional investors, which include corporate houses and high-net-worth individuals, bid for 11.4 times the shares reserved for them.

The quota reserved for retail investors was covered only about 3.15 times. 

Sansera’s IPO involved a sale of 1.7 crore shares by its promoters and Rohatyn, a private equity firm. This included about 51 lakh shares that anchor investors bought a day before the IPO opened for public bidding.

The overall IPO size is Rs 1,280 crore at the upper end of the Rs 734-744 price band. 

The company had earlier attempted an IPO in 2018-19. It had filed its draft proposal in August 2018 and received regulatory nod in November that year. However, it deferred its IPO owing to stock market volatility.

Sansera began operations almost 40 years ago. It makes components for automotive and aerospace clients that include Bajaj Auto, Yamaha, Honda Motorcycle and Maruti Suzuki. 

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Freshworks gains 32% on Nasdaq debut after $1-bn IPO

Freshworks gains 32% on Nasdaq debut after $1-bn IPO
by 5paisa Research Team 23/09/2021

Indian software-as-a-service company Freshworks Inc made a spectacular debut on the Nasdaq stock market in the US with its shares clocking a gain of 32% on the first day of trading.

The company’s shares listed at $43.5 apiece, up almost 21% from the initial public offering (IPO) price of $36 and then inched higher. The shares ended at $47.55 apiece, giving the company a valuation of $13.4 billion.

Freshworks’ current market capitalisation is far greater than the $3.5 billion valuation at which it had last raised funding from private investment firms less than two years ago.

The blockbuster debut came after the company raised about $1 billion by selling 28.5 million shares in the IPO. Freshworks may raise an additional amount if its underwriters exercise an overallotment option. 

The company’s IPO price was higher than its indicative range of $32-34 and the initial band of $28-32 apiece.

Freshworks joins a number of Indian companies to list on US bourses. These include Infosys and Wipro, India’s second- and third-largest software services exporters. 

However, Freshworks is the first Indian SaaS firm to hit the milestone. It is also among a number of Indian tech startups that are going public, as they mature and expand their operations. 

Already, food delivery giant Zomato, gaming company Nazara Technologies and used-car platform CarTrade have listed on Indian stock exchanges. Several others such as hospitality company Oyo as well as digital payments companies Paytm and Mobikwik are also looking to go public in coming months.

Freshworks was started by Girish Mathrubootham a decade ago in Chennai. The company’s main investors include Accel, Tiger Global, Sequoia Capital and Google parent Alphabet Inc’s investment arm CapitalG.

The company is now headquartered in San Mateo, California. Mathrubootham is now worth almost $790 million after the listing pop.

“I feel like an Indian athlete who has won a gold medal at the Olympics,” he said during the bell ringing ceremony on the Nasdaq, accompanied by his wife, two sons and colleagues.

“We are showing the world what a global product company from India can achieve. The fact that we are doing it first in the US markets is truly amazing. Today is day zero for Freshworks all over again and the beginning of so much more,” he added.

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Electronics Mart submits draft papers for Rs 500-crore IPO

Electronics Mart IPO upcoming IPO
by 5paisa Research Team 23/09/2021

Consumer durables and electronics retail chain Electronics Mart India Ltd has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India for an initial public offering.

The Hyderabad-based company aims to raise Rs 500 crore by selling fresh shares in the IPO. The IPO doesn’t include any offer for sale by existing shareholders.

The company intends to use the net proceeds to finance its capital expenditure and meet its working capital requirements to the tune of Rs 133.8 crore and Rs 200 crore, respectively.

In addition, it plans to use Rs 50 crore to pay off its debt. It will use the remaining money for general corporate purposes.

IIFL Securities, JM Financial and Anand Rathi Advisors are arranging the IPO.

Electronics Mart’s business

The company was founded by Pavan Kumar Bajaj and Karan Bajaj in 1980 as a proprietary concern. It began as a consumer durables and electronics store under the name of ‘Bajaj Electronics’.

It is now the fourth-largest consumer durable and electronics retailer in India and largest player in the southern region in revenue terms as of financial year 2019-20. It is especially dominant in Telangana and Andhra Pradesh.

EMIL has 7.5 lakh square feet of retail space across more than 90 stores. It has a workforce of over 2,600 people.

Its multi-brand outlets operate under the Bajaj Electronics brand. It also runs two specialized stores under the name of ‘Kitchen Stories’ catering to kitchen-specific requirements.

The company is also setting up another niche outlet under the name of ‘Audio & Beyond’ for high-end audio and home automation products.

It plans to deepen its store network in Andhra Pradesh and Telangana and gradually expand in the national capital region, the DRHP showed.

EMIL displays more than 6,000 stock keeping units (SKUs) ranging from large appliances such as air conditioners, washing machines, televisions and refrigerators as well as mobiles and small appliances, besides other IT peripherals. It houses products from more than 70 consumer durables and electronic brands.

The company’s total income for the year through 2020-21 inched up to Rs 3,207.37 crore from Rs 3,179 crore the year before despite the restrictions related to the coronavirus pandemic.

Its net profit for 2020-21, however, declined to Rs 58.62 crore from Rs 81.61 crore as consumer spending fell because of the pandemic.