The dry spell in initial public offering (IPO) market seems to be ending soon as four companies have received the capital markets regulator Securities and Exchange Board of India's (SEBI) approval for their proposed public offers. The list includes engineering and technology solutions company Cyient DLM, fintech firm Zaggle Prepaid Ocean Services, software distributer Rashi Peripherals, and out-of-hospital healthcare provider Healthvista India.
While Zaggle and Cyient DLM received the SEBI’s "observation" on March 29, Healthvista India and Rashi Peripherals got nod for their IPOs on March 31, as per the latest update available on the market regulator's website. As per SEBI data, nearly 60 companies have received approval from the markets regulator to launch their IPOs, but some of them have deferred listing plan due to uncertainty in the equity market amid rising interest rates and slowing economic growth.
Earlier this week, Avalon Technologies, a global electronic manufacturing services company, launched its ₹865 crore public issue. This is the first IPO of the financial year 2023-24, which is expected to make its debut on the domestic stock exchanges BSE and NSE on April 18, 2023. Among others, Mankind Pharma, SignatureGlobal (India), Northern Arc Capital, Tata Technologies, and Penna Cement Industries are expected to launch their public offer in the April-June quarter of the current fiscal.
Here’s all you need to know about Cyient DLM, Zaggle, and Healthvista India IPOs:
Zaggle Prepaid Ocean Services
The fintech-SaaS company Zaggle Prepaid Ocean Services received final SEBI observations for its proposed IPO on March 29, 2023. It had filed a draft red herring prospectus (DRHP), also known as the offer document, with SEBI in December 2022. The issuance of the observation letter from the SEBI implies that the company can go-ahead with its public offer scheme.
The IPO comprises a fresh issue aggregating up to ₹490 crore and an offer for sale (OFS) of up to 10,526,316 equity shares by promoters and existing shareholders. The fund raised from the issuance of fresh equity shares will be used for customer acquisition and retention, development of technology and products, payment of debt and for general corporate purposes.
Incorporated in 2011, Zaggle operates in the business-to-business-to-customer segment and is amongst a small number of uniquely positioned players with a diversified offering of financial technology products and services. It has one of the largest number of issued prepaid cards in India in partnership with certain of its banking partners (12.7% of the country’s total prepaid transaction value as of March 31, 2022). Zaggle collaborated with three banking partners; i.e., IndusInd Bank Limited, Yes Bank Limited and NSDL Payments Bank Limited; and has issued more than 45 million co-branded prepaid cards since inception of our business.
Cyient DLM
Engineering and technology solutions company Cyient DLM, a subsidiary of IT services firm Cyient, has also received a green signal from the market regulator to launch its IPO. It had filed its draft papers to SEBI on January 10, 2023.
The company’s IPO comprises a fresh issue of aggregating up to ₹740 crore. The company, however, in consultation with the book running lead managers, may consider a further issue of specified securities, including by way of a private placement, rights issue, preferential offer or any other method at its discretion, as may be permitted under applicable laws for an amount up to ₹148 crore, prior to the filing of the red herring prospectus with the registrar of companies.
As per the document filed with the SEBI, the objective of the IPO is to raise funds to meet incremental working capital requirements, capital expenditure, debt repayment, inorganic growth through acquisitions, and general corporate purposes.
Cyient DLM is one of the leading integrated electronic manufacturing services (EMS) and solutions providers with strong capabilities across the value chain and the entire life cycle of a product. Axis Capital and JM Financial are the book-running lead managers for the issue.
Healthvista India
Healthvista India, an out-of-hospital healthcare provider with brand Portea, has received final observations from SEBI for its proposed IPO, which was filed in July last year. The company aims to raise about ₹1,000 crore through IPO route which comprises fresh issue of equity shares aggregating up to ₹200 crore and an offer for sale (OFS) of up to 56,252,654 shares by selling shareholders, according to the DRHP.
The IPO proceeds from the fresh issue will be used towards funding working capital requirements of its subsidiary, Medybiz Pharma, payment of debt, purchase of medical equipment, marketing as well as brand building activities, inorganic growth initiatives and general corporate purposes.
Healthvista India is the leading out-of-hospital healthcare provider in India, based on revenue and highest market share of 21% of the organised out-of-hospital healthcare market in fiscal 2021, as well as in terms of the number of cities covered as of December 31, 2021, as per F&S report. Under its well established brand Portea, it provides a comprehensive range of out-of-hospital healthcare services, including primary care, geriatric (elderly) and palliative (end-of-life) care, ICU care, post-operative and post-hospitalisation care, chronic care, mother and baby care and cancer care, all at home.
SBI Capital Markets Limited, IIFL Securities Limited, and JM Financial Limited are book running lead managers to the IPO.
Rashi Peripherals
The Mumbai-based Rashi Peripherals, a national distribution partner for information and communications technology (ICT) brands in India, has also received final observation from the SEBI to raise ₹750 crore through an IPO. The company had filed preliminary IPO papers with Sebi on January 18, 2023. The public issue with a face value of ₹5 per equity share is a complete fresh issue of shares of ₹750 crore with no offer-for sale component.
As per the offer document, the company, in consultation with the lead bankers to the issue, may consider a private placement of equity shares for cash consideration aggregating up to ₹150 crore. If such placement is completed, the fresh issue size will be reduced.
The proceeds from its fresh issuance, ₹400 crore will be utilised for prepayment or scheduled re-payment of all or a portion of certain outstanding borrowings availed by the company, ₹200 crore for funding working capital requirements and general corporate purposes.
Rashi Peripherals Limited was incorporated in 1989 by Krishna Kumar Choudhary and Sureshkumar Pansari. It is one of the fastest growing distribution partners for global technology brands in India in terms of revenue growth between fiscal 2020 and fiscal 2022, according to a Technopak report mentioned in the DRHP.
