Gujarat-based small and medium enterprises (SMEs) seem to be cashing in on investors’ growing interest and confidence in initial public offerings (IPOs) by smaller enterprises. The state has churned out two biggest SME IPOs of over Rs 50 crore in last two months. These include offers of Zota Healthcare Limited and Euro India Fresh Foods Limited.
Surat-based pharma player Zota Healthcare recently hit the market with an IPO to raise Rs 58.14 crore, which is the biggest SME public offer so far. The company received bids aggregating Rs 930 crore as against its offer of shares worth Rs 58.14 crore. The issue got oversubscribed 15.97 times and shares will be listed on the National Stock Exchange’s (NSE) SME exchange on May 10.
In March, Euro India Fresh Foods, another SME from the diamond city of Surat, mopped up Rs 51.25 crore through its SME IPO.
“Very few imagined an IPO of the size of Rs 50 crore or more on SME platforms. But SMEs are now dreaming big and Zota Healthcare and Euro Foods are the finest example of it,” said Mahavir Lunawat, group MD, Pantomath Capital Advisors, which has lead managed both these IPOs.
According to him, Gujarat has well-developed eco-system with diverse industrial sectors. There was a hunger for funds in SMEs. With these platforms, increased number of SMEs are tapping the primary market to raise funds. There is greater awareness about the listings in the state hence more and more companies are coming forward to get themselves listed the SME exchanges.
Since the beginning of 2017, 32 firms have come out with their IPOs on SME platforms run by the Bombay Stock Exchange (BSE) and NSE, of these 11 are from Gujarat. Of these, nine offers were oversubscribed 15 times or more.
“The IPO received total bids for Rs 930 crore. Even we did not expected such as a great response. Promoters track record and past investors’ faith in the company have played key role in the success of our offer,” said Ketan Zota, Chairman, Zota Healthcare.
Source: Times of India
