As 2019 comes to an end, it is time to look at the next year. Looking at the list of upcoming IPOs in 2020, it is likely to be a much better and rewarding year for IPO investors than 2019. While 2019 had some notable performances in IRCTC and IndiaMART InterMESH, the year was a dull affair compared to the previous years (check past performances here). However, upcoming IPOs in 2020 offer better money-making opportunities with several big names having already filed draft prospectuses. Here is a quick look:
#1 Equitas Small Finance Bank IPO
The microfinance company was earlier seeking regulatory approvals to list the subsidiary without an IPO and thus, had suggested a reverse merger proposal which was turned down by RBI. Following the RBI dictat, Equitas Holdings has said to list Equitas SFB by March 2020. The company has already filed draft prospectus and is now awaiting SEBI nod.
#2 UTI AMC IPO
UTI AMC is also likely to feature among the biggest IPOs in 2020. The company aims to mobilize more than INR3,000 crore through the IPO which will involve share sale by each of its shareholders – T Rowe Price, State Bank of India (SBI), Life Insurance Corporation (LIC), Bank of Baroda (BOB) and Punjab National Bank (PNB).
UTI AMC has already filed draft prospectus with SEBI in this regard and its listing is likely in the first-half of 2020.
#3 Burger King India IPO
The master franchise of Burger King brand in India has completed 5 years of operations and is now looking to tap the primary market for further funding. The company is backed by Everstone Capital which will be offloading some of its shares through the IPO. According to the draft prospectus, the company’s operations continue to remain in red. Nevertheless, the company is quite close to achieving profitability and the stellar performance of its peer Jubilant FoodWorks on the bourses make it an interesting IPO to watch out for.
#4 SBI Cards IPO
SBI Cards & Payments will be easily the biggest public stock offering of the year and will actually go on to be among the largest IPOs so far. The company is the second largest credit card player in India’s booming market where credit card penetration is just 3%. This gives a long runway to SBI cards (as well as other players) for uninterrupted growth and going by the double-digit profitability track so far, it is not really surprising that it is actively traded in grey market. This is clearly among the most promising upcoming IPOs in 2020.
#5 HDB Financial Services IPO
This will be another high profile IPO from HDFC group. The HDFC Bank subsidiary deals in various kind of loans except home loans. Given the impeccable quality and corporate governance of the group, it is quite natural to see that the previous two IPOs of HDFC AMC and HDFC Standard Life Insurance were big hits.
Nevertheless, there are more reasons to like HDB Financial. The company earned a profit of INR1,153 crore in FY2019, up from INR933 crore in the previous year. Its revenues also jumped 24% to INR8,724 crore in FY2019. HDB Financial has ventured into consumer durable financing and digital products loans after expanding presence in commercial vehicle and construction equipment financing and business loans.
#6 Mazagon Dock Shipbuilders IPO
As the bumper listings of IRCTC and Rail Vikas Nigam IPOs indicate, 2019 was a good year for investors in PSU IPOs. If early indications are to be believed, the next year is also likely to be a positive one for IPO investors and Mazagon Dock Shipbuilders could play a big role in this.
The Mumbai-based company is engaged in the construction and repair of warships and submarines for the Ministry Of Defence for use by the Indian Navy and other vessels for commercial clients. Mazagon Dock Shipbuilders was conferred with the ‘Mini-ratna-I’ status in 2006. The company received SEBI approval in December 2019.
NSE is a relatively old contender for stock market listing; however, little progress was made in the last three years as the listing efforts got entangled in deliberations in regulatory aspects. More recently, management attention of the exchange got caught in the collocation scam which also resulted in a six-month ban on NSE from accessing the capital markets. With the ban coming to an end, the exchange has reached out to finance ministry and SEBI for their opinion on a potential listing.
There is no telling that the IPO will take place in 2020 for sure, but it will be easily among the biggest and most rewarding upcoming IPOs in 2020, provided the pricing is kept reasonable. NSE is reportedly eyeing valuation of INR45,000 crore which means even a 20% float will make IPO size of INR9,000 crore.
#8 IREDA IPO
IREDA is another PSU high on the priority list of Department of Investment and Public Asset Management (DIPAM). The company filed draft prospectus in July 2019 and received SEBI approval in September 2019. The company – a key financier of green energy projects – had sought stock market listing in July 2018 and had received regulatory clearances as well. However, it had shelved plans due to poor market conditions. This time, it is likely to raise INR 700-750 crore from the IPO.
#9 RailTel IPO
RailTel will be another IPO from Indian railways after the successful listings of RITES, IRCON, Rail Vikas Nigam, and IRCTC in last couple of years. The miniratna PSU provides broadband telecom and multimedia network across the country and is among the leading telecom infrastructure providers owning to its optic fiber network on exclusive Right of Way (RoW) along railway tracks. This upcoming IPOs in 2020 will involve sale of up to 25% of the government’s shareholding which is currently the sole owner of the company.
#10 EaseMyTrip IPO
The online travel website’s parent Easy Trip Planners is looking to mobilize up to INR510 crore through this upcoming IPO. The company has already filed draft prospectus with SEBI and is now awaiting regulatory approval for the IPO. Established by siblings Nishant Pitti and Rikant Pitti in 2008, the firm competes with the likes of MakeMyTrip, ClearTrip and Yatra. However, it differentiates itself from its peers by focusing on travel agents and corporate clients.
This list of upcoming IPOs in 2020 is based on the information available in public domain so far and is far from an exhaustive list. In all likelihood, the count of IPOs in 2020 will exceed the paltry number of 17 public offers made in 2019. Some of these IPOs will be driven by regulations and banking sector is one such packet. Apart from Equitas Small Finance Bank, there are expected to two more IPOs of small finance banks. These are Suryoday Small Finance Bank and Fincare Small Finance Bank. Going by the positive listing of Ujjivan SFB, expectations will be high from these banking IPOs as well.
