CarTrade, Nuvoco Vistas, Aptus Housing, Chemplast Sanmar: Which IPO should you subscribe?

Two more initial public offers (IPOs) including Aptus Value Housing Finance India and Chemplast Sanmar hit the primary market on Tuesday. They joined CarTrade Tech and Nuvoco Vistas Corporation which opened for subscription on August 9. These companies are likely to raise over Rs 14,628 crore collectively.

This comes after four companies including Devyani International, Krsnaa Diagnostics, Windlas Biotech and Exxaro Tiles launched their IPOs last week to raise Rs 3,614 crore. So far in the current fiscal, 16 companies have raised Rs 30,666 crore through public offers against Rs 31,277 crore by 30 firms in the entire 2020-21.

Market analysts believe that these IPOs will also sail through due to robust liquidity in the market. Here is what they have to say about the ongoing IPOs:

CarTrade Tech

Choice Broking has given a ‘Subscribe’ rating to CarTrade Tech IPO. “At the higher price band of Rs. 1,618, CarTrade Tech is demanding an EV (enterprise value)/Sales multiple of 26.6 times, which is attractive considering its scalable business model, profitable operations and business growth opportunities in the auto sector value chain,” the brokerage said.

CarTrade is an electronic exchange focusing on the auto sector and thus there is no peer company having similar business operations. The initial public offer of an online auto classified platform was subscribed 41% on Monday, the first day of subscription. The Rs 2,998.51-crore IPO received bids for 53,00,406 shares against 1,29,72,552 shares on offer, as per exchanges data. Anand Rathi Share and Stock Brokers and ICICI Securities also have a ‘Subscribe’ rating on CarTrade Tech IPO.

Nuvoco Vistas Corporation

Nuvoco Vistas Corporation (NVCL) is the fifth largest cement company in India and the largest in East India in terms of capacity. It offers a range of 50 products across cement, RMX and modern building materials. As of 31st March 2021, the company has 11 cement plants (8 in East India and 3 in North India) with a cement capacity of 22.32 MMTPA and WHRS capacity of 44.7 MW.

Ventura Securities has a ‘Subscribe’ rating on the ongoing public offer of Nuvoco Vistas (NVIL). “NVIL has 79% contribution to turnover coming from the trade segment and this is 800 basis points higher than peers. The trade segment has better realisations which lead to higher profitability,” it said.

The IPO was subscribed 16% on the first day of subscription on August 9. The three-day public offer received bids for 97,33,126 shares against 6,25,00,001 shares on offer. The price range for the offer has been fixed at Rs 560-570 per share. Nuvoco Vistas Corporation, part of the Nirma Group, last week raised Rs 1,500 crore from anchor investors.

Aptus Value Housing Finance India

The public issue, with a price band of Rs 346-353 a share, opened for subscription on August 10 and will conclude on August 12. At the upper end of the price band, the IPO is expected to raise Rs 2,780 crore. The net proceeds from the fresh issue will be utilised towards augmenting the company’s tier-1 capital requirements.
Aptus Value Housing Finance on Monday said it has raised Rs 834 crore from anchor investors. The company is primarily a retail-focused housing finance company serving low and middle income self-employed rural and semi-urban customers. As per Crisil, Aptus is one of the largest housing finance companies in south India in terms of asset under management (AUM), as of FY21. The company’s AUM has increased at a CAGR of 34.5% from Rs 2,247.2 crore in FY19 to Rs 4,067.8 crore in FY21. The company is currently operating in Tamil Nadu, Andhra Pradesh, Karnataka, Telangana and the union territory of Puducherry.

Jyoti Roy, DVP, equity strategist, Angel Broking said, “Given strong growth prospects, industry-leading return ratios and strong asset quality we assign a ‘Subscribe’ rating to the issue from a long term perspective though listing gains may be limited.”

Chemplast Sanmar

The company on Monday said it has collected over Rs 1,732 crore from anchor investors. The issue, with a price band of Rs 530-541 a share, opened for subscription on August 10 and will conclude on August 12. Chennai-based Chemplast Sanmar is a leading specialty chemicals manufacturer with a focus on specialty paste PVC (polyvinyl chloride) resin and custom manufacturing of starting materials and intermediates for pharmaceutical, agro-chemical and fine chemicals sectors. Investors can bid for a minimum of 27 equity shares and in multiples of 27 equity shares thereafter.

Earlier, Chemplast Sanmar was delisted nearly a decade from the stock exchanges. It was delisted from the BSE, the NSE and MSE with effect from June 25, 2012, June 18, 2012 and June 25, 2012, respectively.
Commenting on Chemplast Sanmar, Angel Broking said, “While we believe that the India specialty chemical industry is going to be one of the biggest beneficiaries of shifting of supply chains post the Covid-19 pandemic we have concerns over the company’s high debt and negative net worth. At the higher end of the price band, the stock will be trading at P/E multiple of 17.7 times FY21 EPS which is at a discount to other chemical players. However, we have a ‘Neutral’ recommendation on the IPO given our concerns due to high debt on books and negative net worth.”