SREI Infrastructure Finance-promoted road developer Bharat Road Network Ltd (BRNL) and Ahmedabad-based non-banking financial company MAS Financial Services Ltd, which is backed by Sarva Capital, have received the Securities and Exchange Board of India (SEBI)’s nod for an initial public offering (IPO).
The capital markets regulator issued final observations on both the IPO proposals on 26 May. This takes the tally of companies that have received approval for IPO this calendar year to 16, according to SEBI’s website.
Kolkata-based BRNL had filed its DRHP on 17 February. The IPO will comprise a fresh issue of 2.93 crore shares, which will result in a dilution of a 34.9% stake on a post-issue basis.
The IPO size is estimated to be Rs 420-560 crore ($62.59-83.5 million), people familiar with the matter previously told VCCiIrcle. This would value the company at Rs 1,604 crore ($240 million).
BRNL joins a host of infrastructure and construction firms which have either floated IPOs or are looking to tap the public market such as Shankara Building Projects Ltd, Dilip Buildcon, PSP Projects Ltd, GR Infraprojects Ltd and GVR Infra Projects Ltd.
Other infrastructure firms that went public in the past couple of years include Sadbhav Infrastructure Project Ltd, PNC Infratech Ltd and MEP Infrastructure Developers Ltd.
MAS Financial, formerly known M/S Marketing & Allied Services, had filed its DRHP on 27 March.
VCCircle first reported in September 2016 that MAS was finalising plans to take the IPO route, following the footsteps of several banking, financial services and insurance companies that have either gone public or firmed up IPO plans in the last 15 months.
State-owned Housing and Urban Development Corporation Ltd, PNB Housing Finance Ltd, RBL Bank Ltd and ICICI Prudential Life as well as small finance banks Ujjivan Financial Services Ltd and Equitas Holdings Ltd have successfully floated IPOs since January 2016. Other BFSI companies that are looking to go public include SBI Life Insurance Co Ltd, ICICI Lombard General Insurance Co Ltd, AU Financiers (India) Ltd.
MAS, which has been in business for close to two decades and has a presence in six states, is looking to raise an estimated Rs 550 crore ($84.5 million) through the offering, according to information in the IPO document.
The public issue will comprise a fresh issue of shares worth Rs 307.4 crore ($47.2 million) besides an offer for sale worth Rs 242.6 crore by venture capital backer Sarva as well as international development finance institutions DEG and FMO.
DEG or Deutsche Investitions-und Entwicklungsgesellschaft MBH is the private equity arm of Germany’s KfW Bankengruppe specialising in direct and fund-of-funds investments.
FMO or Nederlandse Financierings–Maatschappij voor Ontwikkelingslanden NV is a Dutch development bank headquartered in The Hague.
BRNL and MAS also join a growing list of companies gearing for IPOs this year. These include country’s largest stock exchange operator National Stock Exchange, small finance bank applicant Au Financiers (India) Ltd, cable operator GTPL Hathway, CX Partners-backed Security and Intelligence Services (India) Ltd and Motilal Oswal PE-backed GR Infraprojects Ltd among nearly two dozen firms.
Eight companies have raised nearly Rs 6,400 crore so far this calendar year, extending the good run for IPOs after a blockbuster 2016 when fundraising by companies via initial share sales jumped to a six-year high of Rs 26,500 crore, according to data from SEBI.
The IPO market in India picked up pace after four years of slow activity till mid-2014 when the BJP-led government took over. In 2015, 21 companies had raised about Rs 14,000 crore, as per stock-exchange data.
For snapshot of BRNL’s IPO, click here
For snapshot of MAS’s IPO, click here