Warburg Pincus-backed Au Financiers (India) Ltd and construction firm PSP Projects Ltd have received approval from the Securities and Exchange Board of India (SEBI) for their initial public offerings.
The capital markets regulator issued final observations on the IPO proposal of non-banking finance company Au Financiers on 22 March, the SEBI website showed on Monday. It cleared PSP Projects’ issue on 24 March.
Au Financiers had filed its draft red herring prospectus for an IPO earlier this year while Ahmedabad-based PSP Projects had submitted its documents in December last year.
This takes the tally of companies that have received nod for IPO for this calendar year to 11.
More than a dozen companies, which have already received SEBI approval for an IPO, are waiting to tap primary markets, according to SEBI data. These companies are likely to raise more than Rs 9,000 crore, as per VCCircle estimates.
Snapshot of Au Financiers’ IPO
Jaipur-based Au Financiers will become the third small finance bank (SFB) to tap primary markets after Equitas Holdings Ltd and Ujjivan Financial Services Ltd.
The share sale will comprise a primary market offering worth more than Rs 1,500 crore (around $223 million) which would value Au Financiers at around Rs 8,000 crore ($1.18 billion).
VCCircle first reported that Au Financiers got new investors on board as it looked to pare foreign ownership to adhere to regulatory norms for SFBs.
The proposed IPO comprises an offer for sale (OFS) of 53.42 million shares by promoters and existing shareholders. This represents around 18.8% of the firm’s equity capital, as per draft papers.
Sellers include managing director Sanjay Agarwal, members of the Agarwal family as well as Warburg Pincus, Kedaara Capital, MYS Holdings Pvt. Ltd, ChrysCapital Investment Advisors India and World Bank’ investment arm International Finance Corporation (IFC).
Au Financier was one of 10 applicants to receive the Reserve Bank of India (RBI)’s in-principle approval last year to start an SFB. RBI norms cap foreign stake in SFBs at 49%.
Foreign shareholders currently own about 47.11% stake in Financiers, according to the draft prospectus.
For more details of the Au Financier IPO, click here.
Snapshot of PSP Projects’ IPO
PSP Projects offers a range of construction and allied services across industrial, institutional, government, government residential and residential projects in India.
The public issue is estimated to be worth Rs 225-250 crore ($33-36.7 million).
The IPO comprises a fresh issue of up to 7.2 million shares and will also give a part-exit to the company’s founders through a secondary market sale of 2.88 million shares, according to the prospectus.
PSP Projects joins other infrastructure and construction firms such as GR Infraprojects Ltd that are looking to go public.
The IPO of Shankara Building Products Ltd, which is backed by Fairwinds Private Equity, was fully covered on the second day of the issue a few days ago.
Infrastructure firms that went public in the past year or so include Sadbhav Infrastructure Project Ltd, PNC Infratech Ltd, MEP Infrastructure Developers Ltd and Dilip Buildcon Pvt. Ltd.
For more details of the PSP Projects IPO, click here.
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