Amid the busy IPO season at Dalal Street and three issues opening the same day, investors are baffled which issue should they apply for. Spoilt for multiple choices, some investors will have limited funds to apply for their respective categories, while others would like to pick and choose between Vishal Mega Mart, One Mobikwik System and Sai Life Sciences.
These three issues cater to various categories including retail chain, fintech and pharma industry, offering various value propositions for the investors. In a nutshell, all three issues, opening on Wednesday, December 11, shall close for bidding on Friday, raising a total of Rs 11,615 crore from primary market investors.
Narendra Solanki, Head Fundamental Research - Investment Services, Anand Rathi Shares and Stock Brokers said that both Mobikwiik and Vishal are good for the long term. "Both these companies operate in completely different sectors. Mobikwik is a Fintech company while Vishal Mart is a retailer similarly like D-Mart," he said.
In terms of growth prospects, both are expected to show decent growth but since Mobikwik is a Fintech platform hence it has potential to scale faster compared to Vishal, Solanki added. However, Anand Rathi has an 'avoid' rating on Sai Life Science IPO as it believes that the company is richly priced compared to their peers.
Vishal Mega Mart, the largest issue among the pack, is eyeing to raise Rs 8,000 crore via IPO. The issue is entirely an offer-for-sale (OFS) by the promoters of the company. The company is offering its shares in the range of Rs 74-78 apiece with a lot size of 190 shares. In the grey market, Vishal Mega Mart was commanding a premium of Rs 20 apiece, suggesting 25 per cent upside.
Vishal Mega Mart's financial performance is steady, with both revenue and profitability increasing. For high-risk investors looking to gain exposure to the retail industry, the IPO is a good option, said Shivani Nyati, Head of Wealth at Swastika Investmart.
When evaluating the three IPOs, investors must consider various factors such as market positioning, growth potential, and financial performance, said Akriti Mehrotra, Research Analyst at StoxBox.
"Vishal Mega Mart stands out as the most attractive option due to its strategic positioning in India's rapidly expanding retail sector, particularly in Tier-2 and Tier-3 cities with low organized retail penetration," she added. "Compared to other IPOs, Vishal Mega Mart offers a proven business model and significant room for growth, making it a compelling investment choice."
Sai Life Sciences, the second biggest issue in the pack if offering its shares in the price band of Rs 522-549 apiece, with a lot size of 27 equity shares, to raise a total of Rs 3,043 crore. The grey market premium (GMP) for the issue stood at Rs 35-40, suggesting 7-8 per cent gains for the investors. However, the issue has mostly garnered a mixed view from the analysts.
One Mobikwik Systems, the smallest issue in the pack, is raising a total of Rs 572 crore via IPO which is entirely a fresh share sale of 2.05 crore equity shares. The price band for the issue is fixed at Rs 265-279 apiece, with a lot size of 53 equity shares. The GMP suggesting strong gains of 50 per cent for the investors, commanding a GMP of Rs 135-140 in the unofficial market on Day 1.
Sai Life Sciences is a contract research, development, and manufacturing company that prioritizes innovation, said Nyati. A cautious approach is advised due to the high valuation and little direct benefits the IPO will provide the company, "Investors can apply for both short-term and long-term listing advantages because Vishal Mega Mart and Mobikwik Systems appear to have sound financial figures and fair valuations," she added.
Mahesh M Ojha, AVP Research at Hensex Securities said that Vishal Mega Mart offers best potential for the long-term gains for the investors, followed by Mobikwik. "However, profitability of Mobikwik shall be key for the company amid the improving financial performance," he added.