2017 had been the year of many good IPO in India. Observing stellar performance of some IPO – especially Shankara Building and Avenue Supermarts – people have been looking up to IPO.

Though not all IPO perform very well, some do really well. Here is a list of SME (Small & Medium Enterprises) IPO lined up for 2018.

Read More: 30 Best Mutual Funds to Invest in 2018. 

SME IPOs in 2018:

  • Arvee Laboratories IPO
  • Bhatia Communications IPO
  • Tasty Dairy Specialities IPO
  • Banka Bioloo IPO
  • MMP Industries IPO
  • Kenvi Jewels IPO
  • Mohini Health IPO
  • South West Pinnacle IPO
  • Lorenzini Apparels IPO
  • Sintercom IPO
  • A and M Jumbo Bags IPO
  • Focus Suits Solutions IPO
  • Medico Remedies IPO
  • Gujarat Hy-Spin IPO
  • Gautam Gems IPO
  • Vasa Retail IPO
  • Ashoka Metcast IPO
  • Shree Ram Proteins IPO
  • Solex Energy IPO
  • CRP Risk Management IPO
  • SKS Textiles IPO
  • Silly Monks Entertainment IPO
  • Brand Concepts IPO
  • Rithwik Facility Management IPO
  • Jhandewalas Foods IPO
  • Moksh Ornaments IPO
  • Ajooni Biotech IPO

Recent IPOs in 2018

Arvee Laboratories

Arvee Laboratories began its work by trading in specialty chemicals by getting production done on job work basis from Skylead Chemicals Limited and Skylink Chemicals Private Limited.

On April 20, 2013, the company purchased land, building and machineries from Skylink Chemicals Private Limited which was engaged in production of specialty chemicals. Since 2013, Arvee Laboratories has been increasing its plant & machinery, expanding capacities and modernizing its building.

The company plans to raise Rs 8.91 crore from the market. 2000 shares at Rs 61 will be the price at which the shares will be allotted to the investors applying to this IPO.

Minimum amount to be invested will be Rs 122000. 50% of the shares are being allotted to retail investors. The subscription went on 9th Feb to 14th Feb.

The funds will be used in repaying the unsecured loans of promoters. The revenue and Profit after tax (PAT) has increased continuously till year 2017 which shows that the company is doing good in terms of financial performance. Big share services private limited is the registrar for the company.

Earnings per share 3.83
P/E Ratio 15.93
RONW 37%

 

Bhatia Communications IPO

Bhatia Communications is engaged into the business of retail and wholesale distribution of mobile handsets, tablets, data-cards, mobile accessories, mobile related products etc.

The company sells smart phone handsets of brands like Apple I-Phone, Samsung, OPPO, GIONEE, VIVO. It also sells mobile related products, tablets, data cards, accessories from its self-owned 72 retail outlets chain located all over the South Gujarat region including Surat, Vapi, Valsad, Navsari, Vyara etc.

It sells these phones through its 24 franchisee retail chain dealers located in the South Gujarat region.

Promoters of the company are Mr Sanjeev Bhatia, Mr Harbanslal Bhatia and Mr Nikhil Bhatia. The subscription extended from 8th February to 12th February. The company raised 24.75 crore from the market wherein 1000 shares of 150 each were issued, which was the minimum lot size. The minimum investor to be made by an investor is Rs 150000.

The issue proceeds will be used for meeting working capital requirements and for other corporate purposes. The revenue increased from 96 crore in 2016 to 133 crores in 2017 which is a very good sign backed by 66% increase in the Profit After Tax (PAT).

Earnings per share 0.98
P/E Ratio 153.06
RONW 20.91%

Tasty Dairy Specialities IPO

Tasty Dairy Specialities is currently engaged in processing milk, along with bulk milk procurement and handling during season time which primarily serves to bulk and large institutional customers.

The company is further engaged in value added milk products like Skimmed Milk Powder, Butter, Ghee, Dairy Whitener, Concentrated Milk etc. The company is situated in Uttar Pradesh and its production unit is situated at D-3, UPSIDC Industrial Area, Jainpur, Kanpur Dehat.

With the existing plant and machinery, the company is capable of handling 5,00,000 litres of raw milk which consists of 1,60,000 litres of milk packaging, 20,000 litres of buttermilk packaging, 2,20,000 Litres of Skimmed Milk Powder and Ghee and 2,00,000 litres of bulk milk processing.

Promoters of the company are Mr Atul Mehra, Mrs Sonia Mehra and Mr Prem Nandan Mehra. The subscription extended from 7th February to 12th February. The company raised 24.43 crore from the market wherein 3000 shares of 45 each were issued, which was the minimum lot size. The minimum investor to be made by an investor is Rs 135000.

Majority of the issue proceeds will be used for meeting working capital requirements and a minor portion will be used for other corporate purposes. The revenue decreased from 335 crore in 2016 to 239 crores in 2017 whereas the Profit after tax remained more or less same.

Earnings per share 3.01
P/E Ratio 14.95
RONW 13.12%

Banka Bioloo IPO

Banka Bioloo started in 2012 with an objective to provide sanitation infrastructure and hygienic solutions for human waste treatment and disposal.

The company emphasises on giving sanitation solutions to those who do not have access to toilets, as well as to those who have toilets but face the problem of treating and managing the waste.

The company provides sanitation infrastructure and human waste management solutions and services, involving innovative and simple bio-digester technology patented by Defense Research and Development Organisation (DRDO), the R&D arm of the Indian Ministry of Defense.

The anaerobic bio-digester technology helps customers manage waste onsite, without relying on expensive and energy-consuming sewage infrastructure. Further, it also gives sanitation operations and maintenance (O&M) services to Indian Railways.

Bioloo has installed over 6,000 bio-toilet units across India and currently undertakes 12 O&M service contracts with Indian Railways.

Promoters of the company is Mrs. Namita Banka. The subscription extended from 5th February to 7th February.

The company raised 12.63 crore from the market wherein 1200 shares of 115 each were issued, which was the minimum lot size. The minimum investor to be made by an investor is Rs 138000.

Majority of the issue proceeds will be used for meeting capital expenditures, working capital requirements and other corporate purposes. The revenue increased from 1433 lakhs in 2016 to 1516 lakhs in 2017 backed by huge increase in Profit After Tax (PAT) from 32 to 115 lakhs.

Earnings per share 3.84
P/E Ratio 29.95
RONW 29.1%

IPO vs Mutual Funds

If you have no knowledge of the equity markets but are looking to gain from the equity markets, mutual funds are ideal. Investments can be made in Mutual Funds since they provide a wide variety and also the amount of investment can vary as per investor’s preference.

Many mutual funds invest in IPOs – many times at discounted rates that are not available to retail investors.

It is necessary to not get carried away by the hype surrounding IPOs. Don’t jump into IPO if you do not have the necessary skills.

In a mutual fund, a skilled and trained professional handles all investments for you and therefore, you can benefit from the equity markets without spending too much time gaining the skills needed to understand the markets.

Following are the different funds:

  • Large Cap Funds– Here the investment is made in large cap companies. These companies offer 12-18% return. Moderate risk is involved and it is suggested to invest here for 4 years or more.
  • Mid Cap Funds– Here the investment is made in mid cap companies. These companies are offer 15-20% return. Moderately high risk is involved and it is suggested to invest here for 5 years or more.
  • Small Cap Funds– Here the investment is made in small cap companies. These companies offer 15-20% return. High risk is involved and it is suggested to invest here for 6 years or more.
  • Balanced Fund– This fund is a combination of equity and debt in its portfolio. Depending on the proportion of investment made in Equity and Debt, the risk and returns are accordingly determined. It is suggested to invest here for 2 to 3 years. Returns in this fund range from 11-14%.

Investment can be made via lump sum investment or through SIP (Systematic Investment Plan) mode in any of these funds.

Moreover return is something that cannot be promised but these return estimates have been given on the basis of past performance.

Mutual Funds for 2018

Large Cap Fund:

These funds invest in large companies that have a history of good performance and stable balances.

Mid Cap Fund:

These are funds that are high risk – high return. They’re a bit riskier than large cap funds.

Small Cap Fund:

These are the funds that you can invest in if you want very high growth. They are very high risk too.

If you want to see more funds to invest in 2018, check out: 30 best funds to invest in 2018.

Past year track record:

Year 2017 turned out to be one of the very good years for primary capital markets in India. Over Rs 67,000 crore were raised in the initial public offering (IPO) market by the Indian companies in the year 2017. The excellent performance by the Indian capital markets also helped in motivating the interest of the investors. Most of the IPOs received heavy subscription in the year 2017.

In the year 2018, retail investors and institutions are continuing to show interest in IPOs by picking large stakes in the IPOs. The last IPOs that joined the list of oversubscribed issues in 2017 were of Astron Paper and Board Mill Ltd. And, even these were subscribed by over 243 times last week before listing. The year 2017 has seen the highest number of grossly oversubscribed issues.

Motivated by investor interest, about 100 Small and Medium Enterprises (SME) are anticipated to be listed on the Bombay Stock Exchange’s platform this year, as informed by a top official.

In year 2017, around 55 SME companies had taken the IPO route and got listed on the BSE’s platform.

BSE SME head Ajay Thakur:

The IPO pipeline is great, which shows the confidence among the companies. BSE are anticipating around 100 SME IPOs in 2018.

A burst of listing is anticipated this year as 75-100 companies are expected to get listed in the BSE in 2018 raising an approximate amount of Rs 1000 to 1500 crore.

He said although the BSE platform has been present for some time, the last two and half years have seen a lot of IPOs on the BSE platform.

Many listed firms have seen improvement in top line after their listing. The SME IPO Index has given a good return of over 80 per cent since last year.

He also said that that already 35 companies have filed their prospectus and more filings are anticipated to happen in future.

According to him, a combination of factors are anticipated to add to a more number of listing and some of the firms that had delayed listing in 2017 are anticipated to file their prospectus in the year 2018.

He also pointed out that since December 2012, 254 prospectuses were filed out of which 216 SMEs have already been listed and till date, 40 companies have moved from the BSE platform to the main board of the exchange.

He also informed that most of the companies that approached us are from Gujarat and Maharashtra.

Future ahead:

Moreover, as many as 22 companies have already taken BSE’s consent, while another 19 firms are also waiting for approval.

Funds raised through the issue will be used for expansion plans of the business, working capital requirements and other general corporate purposes.

These SME companies belong to a wide range of sectors, like, media, automotive components, pharma, logistics, infrastructure and hospitality.

Governance structures, better credit rating, easy finances and branding are some of the key advantages for listing on SME platform.

Bombay Stock Exchange had launched SME platforms in March 2012 to provide chance to such firms to raise capital for growth, expansion and development.

Currently, there are 180 companies listed on the BSE’s Small Medium Enterprise’s platform. This segment has assisted these firms to raise an amount of ₹1,834 crore.

These increase in the number of IPOs is increasing the flow of funds in the capital market. More and more number of retail investors are looking to invest in the Initial Public Offerings (IPO) but these investors are not successfully getting allotments. These investors get their amount refunded from these IPOs after investing it for a couple of days since the day of subscribing to the IPO.

Happy investing!

Disclaimer: views expressed here are of the author and do not reflect those of Groww.