Looking to invest in IPOs? 3 Indian companies file papers to raise Rs 7,500 crore

As the  equity markets have been performing better in the last 2 months, IPOs are back in the game. Three new companies have joined the IPO bandwagon to collectively raise about Rs 7,500 crore.

Virat Kohli-backed Go Digital Insurance will raise about 5000 crore, Rakesh Jhunjhunwala-backed Concord Biotech will raise about 2,000 to 2500 crore and Rajendra Seksaria-backed Balaji Solutions will raise about Rs 400 crore.

1. Go Digit Insurance (about Rs 5,000 crore) 

ਡੂ ਦ ਡਿਜਿਟ ਡਿਜਿਟ!

Every corner of the nation is doing the Digit Dance! @heydigit

When 3 crore people show trust in my Digit for their car, bike, health and travel insurance, I can't help but dance myself!

Just Do the Digit! https://t.co/5h1UsejAGE#DoTheDigitDigit #ad pic.twitter.com/UeZ2FAdbX7

— Virat Kohli (@imVkohli) June 28, 2022

Go Digit provides motor, health, travel, fire, and other small-ticket insurances with motor insurance making up more than 50% of the company's business. Go Digit was the first unicorn of 2021 and currently has about 2.4% market share in general insurance and 4.7% market share in the motor car insurance market. GO Digit might raise about Rs 5,000 crore via an IPO post-October 2022. The Virat Kohli-backed company started in October 2017 and IRDA rules do not allow promoters to sell stakes in their company before the completion of 5 years. 

What will they do with the funds? The IPO proceeds will be used for augmenting the capital base, expanding business and improving the solvency margins and solvency ratios. As per the Insurance Act, insurance companies have to maintain a solvency ratio of 1.50 whereas Digit's ratio as of March 31, 2022, was 2.01.

How will they raise funds? 

• Go Digit Insurance will raise Rs 1,250 crore from a fresh issue of shares.
• Offer for sale of 10.94 crore equity shares (balance).

In FY22, the company’s net loss widened to Rs 295.86 crore from Rs 122.76 crore in the previous year. Total assets under management increased 68% in FY22 to Rs 9,393.88 crore from Rs 5,590.10 crore a year ago.

2. Concord Biotech (Rs 2000 to Rs 2500 crore)

Concord Biotech is an Ahmedabad-based company that makes fermentation-based active pharmaceutical ingredients (APIs). Concord Biotech is backed by private equity firm Quadria Capital and Rare Enterprises, which was set up by billionaire investor Rakesh Jhunjhunwala. 

As of March 2022, Concord had a portfolio of 56 brands and 65 products, including 22 APIs and 43 formulations. Concord has a market share of about 20% by volume across fermentation-based API products and supplies products to about 70 different countries. 

How will they raise funds? 

• Concord Biotech will raise the money entirely through an Offer For Sale (OFS) of 2.09 crore equity shares. By the way of an IPO, Quadria Capital is selling its entire 20% stake at a profit. (Quadria had bought this 20% stake in 2016 for Rs 500 crore and will be selling it for at least Rs 2000 crore). The IPO will also include a reservation for eligible employees. 

Concord Biotech's revenue from operations rose by 15.56% to Rs 713 crore for the financial year 2022 from Rs 617 crore in the previous year. The rise was primarily due to an increase in sales volume of its products to existing customers; sales to its new customers; and an increase in prices of some of the products, which was partially offset by the decrease in prices of certain products. However, profit after tax dropped to Rs 175 crore in FY22 from Rs 235 crore in the previous fiscal. 

3. Balaji Solutions (about Rs 400 crore)

Balaji Solutions is a Kolkata-based manufacturing and distribution company that deals in IT hardware, peripherals, and mobile accessories. In 2017, it launched a mobile accessories vertical to focus on data cables, power adapters, wired earphones etc under the brand name Foxin. 

How will it raise funds? 

• The IPO will consist of a fresh issue of equity shares worth up to Rs 120 crore.
• An offer-for-sale (OFS) of up to 75 crore equity shares by the promoter and selling shareholders. (Rajendra Seksaria is selling up to 15 crore shares and Rajendra Seksaria HUF will be offloading up to 60 crore shares).

Balaji Solutions will use the IPO proceeds worth Rs 86.60 crore to fund its incremental working capital requirements and for general corporate purposes. The offer also includes a reservation for a subscription by eligible employees.

Balaji Solutions' revenue from operations for FY22 was Rs 482.25 crore from Rs 483.48 crore in FY21. Its profits for FY22 stood at Rs 15.39 crore.