September is ending with three new IPOs—UTI AMC, Mazagon Dock Shipbuilders, and Likhitha Infrastructure. All three launch on the 29th of September and close on the 1st of October. Here is a quick brief on all of them.
UTI AMC Limited
Issue opens: 29 September 2020
Issue closes: 1 October 2020
Price range: ₹552–₹554
IPO Size: ₹2,152–₹2,159 crore
Lot size: 27
The UTI Asset Management Company Limited is the oldest asset management company (AMC) in the country. As of 30 June 2020, it is the second-largest AMC in India in terms of total assets under management (AUM). Further, it is the eighth-largest asset management company in India in terms of mutual fund quarterly average AUM (QAAUM).
The AMC manages the domestic mutual funds of UTI Mutual Fund, provides portfolio management services to institutional clients and high net worth individuals (HNIs), and manages retirement funds, offshore funds, and alternative investment funds. As of June 30, 2020, the company’s total QAAUM for its domestic mutual funds was ₹1.33 lakh crore, while ‘Other AUM’ was ₹8.49 lakh crore. As per CRISIL, as of 31 March 2020, the company’s client base accounted for 12.2% of the approximately 89.7 million folios managed by the Indian mutual fund industry.
The issue consists of an initial public offer of up to 38,987,081 equity shares by the existing shareholders. It is an offer for sale wherein the State Bank of India (SBI), Life Insurance Corporation of India (LIC), Bank of Baroda (BOB), Punjab National Bank (PNB), and T. Rowe Price International will dilute their stake in the AMC. At the upper end of the price band, the IPO will help UTI AMC raise ₹2,159 crore.
Credibility and popularity notwithstanding, there are a few caveats investors should be mindful of when planning to invest in this IPO. One, its stakeholders will dilute their stake in the company (as per SEBI’s mandate, of course). Second, UTI AMC’s business faces headwinds because of selling pressure in the mutual fund industry.
Mazagon Dock Shipbuilders Limited
Issue opens: 29 September 2020
Issue closes: 1 October 2020
Price range: ₹135–₹145
IPO size: ₹413–₹444 crore approx
Lot size: 103
First constructed in 1774 as a small dry dock, Mazagon Dock Shipbuilders Limited (MDL) was incorporated as a public limited company in 1934. It was taken over by the Govt. of India in 1960. and is today a Defence Public Sector Undertaking under the Ministry of Defence. It is one of India’s leading shipyards with a capacity to meet the requirements of the Indian Navy. The shipyard builds warships and conventional submarines at its facilities in Mumbai and Nhava. Major customers for the shipyard include Indian Navy and Coast Guard.
Since 1960, MDL has built a total of 795 vessels, including 25 warships, from advanced destroyers to missile boats and three submarines. MDL had also delivered cargo ships, passenger ships, supply vessels, multipurpose support vessels, water tankers, fishing trawlers, barges, and border outposts for customers in India as well as abroad.
The issue is an offer for sale of 30,599,017 equity shares at a price band of ₹135–145. Considering the upper end of the price band, the company will raise ₹443.68 crore through the IPO.
Likhitha Infrastructure Limited
Issue opens: 29 September 2020
Issue closes: 1 October 2020
Price range: ₹117–₹120
IPO Size: ₹59–61 crore approx
Lot size: 125
Founded in 1998, Likhitha Infrastructure is an oil and gas pipeline infrastructure service provider in India. It lays down pipeline networks, and provides operations and maintenance services to city gas distribution (CGD) companies in India.
The Telangana-based company’s client base comprises established public and private-sector players in the oil and gas industry. Some of these include GAIL, Indian Oil, ONGC, and Indraprastha Gas Limited. The company has presence in over 16 states, and claims to have laid over 600 km of oil and gas pipelines in the past 5 fiscals.
Likhitha Infra’s revenues have consistently been on the rise for the past three fiscals: ₹88.60 crore (FY18), ₹140.54 crore (FY19), ₹162.79 crore (FY20). Meanwhile, profits at ₹7.16 crore (FY18), ₹17.85 crore (FY19), and ₹19.88 crore (FY20) have followed suit.
The issue comprises an offer of 51,00,000 equity shares offered within a price band of ₹117–120. Considering the upper end of the price range, the issue size stands at ₹61.2 crore.
That was a quick primer on the IPOs this week. In case you wish to subscribe for any of them, click here to apply via Upstox.
How to apply
Select the IPO you want to apply for from the list of open issues. Enter your correct UPI ID and select the investor type. The quantity should be a multiple of the lot size. If you wish to apply at the cut-off price, simply click on the checkbox next to the ‘Cut-off price’.
You will receive an SMS from the NPCI confirming your bid and requesting you to accept the mandate on your UPI app. We have noticed a significant delay in UPI payment SMS/notifications from NPCI. In case you don’t get it immediately, don’t worry. Your mandate will still be processed. At times, the message is received after the mandate has been accepted. In such a case, please ignore this message.
How to check your IPO allocation?
The allotment status will be available on or around 8 October 2020. The allotted shares will be credited in the demat account by 9 October 2020. The status-check link is not activated by the registrar yet. We will provide you the link as soon as the registrar makes it live. This may happen after the IPO is closed, i.e., after 1 October 2020.
Happy investing!
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