Month: December 2024

 India’s primary market is set to buzz with six initial public offerings (IPOs)—three mainboard and three SME—alongside 12 new listings from Monday, December 16, to Friday, December 20. Last week, seven SME IPOs and five mainboard IPOs hit the Indian primary market, all of which will make their stock market debut in the coming week.

The SME IPO NACDAC Infrastructure Limited will open on Tuesday, followed by another SME IPO, Identical Brains Studios Limited, on Wednesday. On Thursday, two mainboard IPOs, Mamata Machinery Limited IPO and Transrail Lighting Limited IPO, will open for subscription. On the same day, one SME IPO, Newmalayalam Steel Limited IPO, will also open for subscription. On Friday, subscriptions for mainboard IPO Ventive Hospitality Limited IPO will open.

Among the mainboard IPOs already open, Mobikwik IPO witnessed a whopping oversubscription of 119.38 times overall, while Vishal Mega Mart IPO was booked 27.28 times. From the SME IPO space, Hamps Bio IPO, which opened on Friday, was oversubscribed by nearly 11 times on the first day of subscription only.

Upcoming IPOs next week

Let’s take a look at the new mainboard IPOs that will open for subscription next week:

Mamata Machinery IPO 

The ₹179 crore book-built issue will open on Thursday, December 19, and will remain open till Monday, December 23. 

Share allotment is likely to be finalised on Tuesday, December 24, and the stock is expected to be listed on the BSE and the NSE on Friday, December 27. 

The issue has no fresh shares on offer and it is entirely an offer for sale (OFS) of about 74 lakh shares. 

Beeline Capital Advisors Pvt Ltd is the book-running lead manager of the issue, while Link Intime India Private Ltd is the registrar.

Transrail Lighting IPO

It combines a fresh issue of ₹400 crore and an offer for sale (OFS) of 1.02 crore shares. The book-built issue will open for subscription on Thursday, December 19 and will close on Monday, December 23. 

Share allotment is likely to be finalised on Tuesday, December 24, and the stock may debut on the NSE and the BSE on Friday, December 27. 

Inga Ventures Pvt Ltd, Axis Capital Limited, HDFC Bank Limited, IDBI Capital Market Services Limited are the book-running lead managers, while Link Intime India Private Ltd is the registrar for the issue.

Ventive Hospitality IPO

The ₹1,600 crore book-built issue is entirely a fresh issue which will open on Friday, December 20, and conclude on Tuesday, December 24. 

Share allotment could be finalised on Thursday, December 26, and the tentative listing day for the stock is Monday, December 30. It will be listed on the BSE and the NSE. 

JM Financial Limited, Axis Capital Limited, HSBC Securities & Capital Markets Pvt Ltd, ICICI Securities Limited, IIFL Securities Ltd, Kotak Mahindra Capital Company Limited, and SBI Capital Markets Limited are the book-running lead managers, while Kfin Technologies Limited is the registrar for the Ventive Hospitality IPO.

Let’s take a look at the new SME IPOs that will open for subscription next week:

NACDAC Infrastructure IPO

It is entirely a fresh issue of 28.60 lakh shares to raise about ₹10 crore. The issue will open on Tuesday, December 17, and will conclude on Thursday, December 19. 

Share allotment could be finalised on Friday, December 20, and the stock may be listed on the BSE SME on Tuesday, December 24. 

GYR Capital Advisors Private Limited is the book-running lead manager and Maashitla Securities Private Limited is the registrar of the NACDAC Infrastructure IPO.

Identical Brains Studios IPO

It is also entirely a fresh issue of 36.94 lakh shares to raise nearly ₹20 crore. It opens for subscription on Wednesday, December 18, and closes on Friday, December 20. 

The company may finalise share allotment on Monday, December 23, and the stock is expected to be listed on NSE SME on Thursday, December 26. 

Socradamus Capital Private Limited is the book-running lead manager, while Bigshare Services Pvt Ltd is the registrar for the issue.

Newmalayalam Steel IPO

An entirely fresh issue of 46.40 lakh shares, the IPO aims to raise about ₹42 crore. The issue opens on Thursday, December 19, and closes on Monday, December 23. 

Share allotment is expected to be finalised on Tuesday, December 24, and the stock may be listed on the NSE SME on Friday, December 27.

Khandwala Securities Limited is the book-running lead manager, while Kfin Technologies Limited is the issue registrar.

IPO listings next week

There are as many as 12 new listings in the coming week. 

On Monday, Dhanlaxmi Crop Science stock will be listed on the NSE SME platform. 

On Tuesday, two stocks – Toss The Coin and Jungle Camps India- will be listed on the BSE SME. 

On Wednesday, five stocks will debut on Indian bourses, out of which Vishal Mega Mart, One Mobikwik Systems and Sai Life Sciences will debut on the NSE and the BSE, while Purple United Sales and Supreme Facility Management will debut on the NSE SME.

On Thursday, shares of Inventurus Knowledge Solutions are expected to debut on the BSE and the NSE, and on the same day, Yash Highvoltage will debut on the BSE SME platform.

Finally, on Friday, shares of the International Gemmological Institute (India) may be listed on the BSE and the NSE, and those of Hamps Bio could debut on the BSE SME platform.

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India’s trade deficit expanded to a record high in November, as the nation’s import bill ballooned, particularly due to a rise in gold shipments. 

The gap between exports and imports stood at $37.8 billion in November, trade ministry data showed Monday, much higher than the $23 billion deficit forecast by economists in a Bloomberg survey. Trade deficit in October stood at $27.1 billion.

A widening trade deficit may put further pressure on India’s current account deficit and the local currency, which weakened 0.5% against the dollar last month, marking its worst month since March.

Imports rose 27% in November from a year earlier to $69.95 billion, while exports stood at $32.11 billion, down 4.9%. Inbound shipments were $66.3 billion in October, while outbound shipments stood at $39.2 billion.

Gold imports shot up to a record high of $14.8 billion in November as demand for the yellow metal increased after the government slashed the custom duty to 6% from 15% in July. Demand for gold also rose as rising geopolitical tensions made the asset class more attractive to investors.

What Bloomberg Economics Says

India’s record trade deficit in November will weaken the rupee further. Imports surged during the month and exports declined. While further details are pending, we believe the Reserve Bank of India’s FX sales will need to continue for now to prevent a sharp fall in the currency. 

Abhishek Gupta, India economist

While India reported its slowest growth in almost two years in the July-September quarter, there’s some rebound in high-frequency indicators in the last few months. However, rising conflict in the Middle East and Donald Trump’s proposed tariffs may complicate the growth outlook in 2025.

The World Trade Organization last week said the outlook for global trade “is clouded by rising economic uncertainty, including possible shifts in trade policy.”

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Quick commerce major Zepto experienced a substantial surge in revenue. It reported an impressive increase of approximately 120%, with revenues climbing from Rs 2,026 crore in FY23 to Rs 4,455 crore in FY24. This growth was attributed to the growing trend of customers opting for 10-minute deliveries.

Zepto saw strong revenue growth, which helped to partially offset its losses thanks to improved margins. The company’s net loss decreased by 2%, totaling Rs 1,248.64 crore in FY24 compared to Rs 1,271.84 crore in FY23. As a result, the loss as a percentage of revenue decreased significantly from 63% in FY23 to 28% in FY24.

Zepto significantly invested in marketing, materials, and other expenses, leading to a 72% rise in total expenses from Rs 3,350 crore in FY23 to Rs 5,747 crore in FY24. Despite this substantial increase, the company managed to reduce its losses slightly, by approximately 2%, from Rs 1,272 crore in FY23 to Rs 1,249 core in FY24.

“Our accounting revenue has grown 120% year-on-year from…Even with 120 percent growth, our absolute losses came down year-on-year with PAT as a percentage of revenue improving from -63% in FY23 to -28% in FY24. We expect to continue this growth momentum with a clear path to PAT profitability in the near term,” CEO and co-founder Aadit Palicha said on LinkedIn.

Zepto’s largest expenditure in the fiscal year was on the purchase of goods, totaling Rs 3,449.83 Cr. This marked a 77% increase from the previous year’s expenditure of Rs 1,953.03 Cr.

Employee Expenses: Zepto allocated Rs 426.30 crore towards its workforce, showing a 62% increase from the previous fiscal year’s expenditure of Rs 263.45 crore.

Warehousing Cost: Expenditure for warehousing totaled Rs 492.65 crore, reflecting a 43% increase from the previous fiscal year’s spending of Rs 344.79 crore.

Ad Expenses: Zepto invested Rs 303.55 Cr in advertising and promotion in FY24, representing a 41% increase from the previous fiscal year’s expenditure of Rs 215.82 crore.

Established in 2021 by Aadit Palicha and Kaivalya Vohra, Zepto Datalabs offers speedy 10-minute delivery services for various products including groceries, packaged foods, ready-to-eat meals, daily essentials, and electronics.

In 2024, Zepto embarked on a successful fundraising journey, securing a total of over $1.3 billion in three rounds of funding. The company raised $665 million in June, followed by $340 million in August, and an additional $350 million in November.

Zepto is one of the top three quick commerce companies in India, competing with Zomato’s Blinkit and Swiggy Instamart. While Blinkit leads the market, Swiggy Instamart and Zepto are in a close competition. In terms of revenue, Zepto surpasses both competitors.

In the fiscal year FY24, Blinkit generated revenue of Rs 2,301 crore, Swiggy Instamart had total sales of Rs 1,100 crore, and Zepto outperformed with a top line of Rs 4,455 crore.

These three companies face competition from Flipkart Minutes, Tata BigBasket, and are gearing up for the entry of industry giants like Amazon.

Zepto’s IPO plans

Palicha expressed optimism regarding the potential for an initial public offering (IPO) in 2025. In November, Zepto secured $350 million in fresh funding from prominent domestic investors such as Indian HNIs, leading financial institutions, and family offices in a round championed by Motilal Oswal’s Private Wealth division. The funding round was aimed at bolstering domestic ownership in anticipation of a potential IPO in 2025, according to Palicha.

Palicha told news agency PTI: “That’s our ambition…of course, capital markets may change, but for now we’re optimistic if the business continues to perform as well, that we will go public in calendar 2025.”
It is worth noting that Zepto’s rivals, Zomato, which operates Blinkit, and Swiggy, which runs Instamart, are listed on the stock exchanges.

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Cumulative investment commitments in Indian data centres are likely to surpass $100 billion by the end of 2027, according to a report by CBRE, a real estate advisory firm. Between 2019 and 2024, India attracted investment commitments of $60.3 billion from both domestic and international investors. 

The report stated that India’s data centre capacity is projected to reach approximately 2,070 megawatts (MW) by the end of 2025. The current data centre capacity stands at around 1,255 MW, with nearly 475 MW of capacity under construction across Mumbai, Chennai, and the Delhi-National Capital Region (NCR). 

Further, in 2024 so far, about $19 billion of investments have been committed. Maharashtra, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal emerged as the leading states in terms of cumulative investment commitments. The year may end with India’s data centre capacity being expanded to 1,600 MW. 

Mumbai continues to dominate data centre stock, followed by Chennai, Delhi-NCR, and Bengaluru, accounting for 90 per cent of the country’s total data centre stock as of September 2024, the report said. 

Currently, India’s total data centre stock stands at about 19 million square feet (msf) of land area, which is expected to reach 31 msf by the end of 2025. Key demand drivers for the year ahead include banking, financial services, and insurance (BFSI) and technology companies. 

Anshuman Magazine, chairman and chief executive officer, India, South-East Asia, Middle East, and Africa, CBRE, believes that the demand from the BFSI, technology, and telecommunications sectors, combined with state-level policy incentives, will continue to fuel this growth, making India one of the most attractive destinations for data centre operators in the coming years. 

States including Maharashtra, Telangana, and Tamil Nadu have released state-specific incentives while deeming data centres as ‘essential services’. 

Additionally, expansion into tier-II cities like Ahmedabad, Kochi, Visakhapatnam, and Lucknow amid regional data consumption growth, cost-efficiency advantages, sustainability, and demand for artificial intelligence (AI)-driven technologies were some of the industry trends highlighted by the report.

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Blinkit, the quick commerce platform owned by India’s food delivery market leader Zomato, has stepped into the 10-minute food delivery space by launching its standalone app, Bistro. The new platform offers snacks, desserts, and beverages to be delivered in 10 minutes, raising competition for other quick commerce platforms like Zepto Cafe and Swiggy Bolt. Bistro is currently accessible in a few areas of Gurugram.

Earlier in 2022, Zomato tested a 10-minute food delivery called Zomato Instant in Gurugram but discontinued it quickly. Zomato’s meal delivery service, which offers home-cooked meals made by home chefs, Zomato Everyday, replaced its 10-minute delivery service back in 2023. Zomato Everyday is currently functional in many cities nationwide, providing affordable, home-cooked meals to many.

While Swiggy’s Bolt is now serviceable in more than 400 cities and accounts for 5% of its total deliveries, Zepto is also upscaling its Zepto Cafe and is all set to launch its separate application this week. According to reports, Zepto Cafe clocks nearly 30,000 orders per day.

Zomato Q2 results

Zomato’s net profit for the July-September quarter of the current fiscal year stood at ₹176 crore, climbing significantly from ₹36 crore profit after tax (PAT) posted in the year-ago period. When compared sequentially, PAT was down by 30% as compared to ₹253 crore recorded in the April-June quarter of FY25.

The company’s food delivery segment posted a gross order value (GOV) of ₹9,690 crore for Q2 FY25, and its grocery delivery vertical, Blinkit, had a GOV of ₹6,132 crore.

Zomato recently completed its ₹8,500 Qualified Institutional Placement (QIP), allocating 33.65 crore shares at ₹252.62 per share. The company aims to use the money to expand its quick commerce operations and for marketing purposes. The allotment was at a 5% discount compared to the floor price of ₹265.91 per share.

Zomato shares

While Zomato’s shares opened in the red at ₹279 apiece, down from its previous close of ₹284.9, the stock quickly recovered in the morning trade on Friday, December 13.

The company said on Thursday that Thane’s GST department has imposed a tax liability of ₹803.4 crore, which includes interest and penalty. The tax demand order is due to the non-payment of GST on delivery charges with interest and penalty on the same, as per Zomato’s regulatory filing.

Zomato’s scrip is ready to enter the BSE SENSEX on December 23, 2024 marking a significant development for the company. The stock has seen an upward trend over the year and has given 129% year-to-date (YTD) returns and a 138% surge in the past 12 months.

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