The year 2017 was a great year for the initial public offering (IPO) market. According to market experts, several factors — including a resilient Indian economy and strong domestic liquidity coming into equities — contributed to the buoyant market for IPOs.
The year 2018 seems even more promising for new IPOs. Many companies are awaiting approval from the Securities and Exchange Board of India (SEBI) to float IPOs, and many more filings are expected in the near future.
The market witnessed large-sized IPOs including General Insurance Corp of India, The New India Assurance Co Ltd, HDFC Standard Life Insurance Co Ltd and SBI Life Insurance Co Ltd in 2017. It is expected that more such IPO's will come to the market in 2018 also.
Some of the major upcoming IPOs include:
National Stock Exchange (NSE) — the country's largest bourse by profits — has plans to go public. NSE withdrew its plans of Rs 10,000 crore issue in 2017 is to come up with a mega IPO in 2018. SEBI's approval for the IPO has been hanging fire: The market regulator has still not resolved the co-location matter, through which the exchange allegedly provides preferential access to some broker.
Indian Railway Catering and Tourism Corporation (IRCTC) handles almost 60 percent of railway ticket bookings in India. This state-run railway company will go public in 2018 after resolving its issues related to service charges.
ICICI Securities is the broking arm of ICICI Bank. In November the board of ICICI Bank approved the sale of shares in ICICI Securities through the initial public offering. The company plans a Rs 3,000-4,000 crore IPO issue. The lead managers for the IPO are Bank of America Merrill Lynch, CLSA, IIFL Holdings and Edelweis. The issue comprises sale of 20 percent stake by ICICI Bank.
HDFC Asset Management Company (AMC) will be the second asset management company to list after Reliance Nippon MF. The board of directors at HDFC AMC has approved initiating the process for an IPO. The company had listed its insurance arm in 2017. HDFC and Standard Life Investments have also, in principle, approved the IPO of HDFC AMC by offering shares to the public in one or more tranches.
State-owned Hindustan Aeronautics Ltd (HAL) initiated the process of IPO in 2017 by filing the draft red-herring prospectus (DRHP) with SEBI. The company, which is into aircraft manufacturing for the military force, is seeking to sell about 3.62 crore shares in the IPO. In 2013 the Union government appointed four merchant bankers — SBI Cap, Goldman Sachs, Barclays and Axis Capital — for managing the stake sale.
Reliance General Insurance
Reliance General Insurance Company is a part of the Anil Ambani-led Reliance Group. The firm got approval from market regulator SEBI in November 2017. The IPO comprises both fresh issue shares by Reliance General Insurance and an offer for sale of shares by Reliance Capital.
The firm plans to utilise the proceeds from the fresh issue towards augmenting the solvency margin and consequently increasing the solvency ratio. Apart from that the money will be used to meet future capital requirements which arise out of growth. RGICL provides a wide range of general insurance products like fire, motor, health, home, travel, weather and crop.
Aster DM Healthcare Limited
Aster DM Healthcare Limited — the well-known healthcare company in the Middle East, India, and the Far East — is also planning an IPO in 2018. The company plans to sell 10 percent of its stake by October 2018. The listing will be either in Mumbai or London.