IPO Market Set for a Busy Week; these 2 firms to launch a public offer. details here

So far this year, only three companies have launched their public offer and raised around $7,429 crore, according to Prime Database. These three companies were Adani Wilmar, AGS Transact Technologies, and Vedant Fashions, which was also the latest IPO launched on February 4. Last year the IPO market saw stellar demand with companies making a huge $1.18 billion through the public sale of shares.

However, globally, the IPO markets have plunged in the first quarter (January-March) of this after a record performance in 2021. This is due to volatility fueled by the war between Russia and Ukraine and the stubborn rise in inflation that has warned borderline and skeptical investors. Data compiled by Bloomberg revealed that IPOs worldwide in the first three months of 2022 raised around $65 billion, plummeting by a whopping 70% from $219 billion recorded in the corresponding period last year, which leading the global market on track for the lowest quarterly revenue since the start of the Covid-19 pandemic in 2020.

Here are the highlights of the two IPOs scheduled for next week in the Indian primary market:

Exports:

UMA Exportaciones will launch its public offer on March 28 and the tenders will be available until March 30. The issue is 100% book building and the size is in the order of $60 million rupees. A price band of $65 to $68 each fixes on the subject. The lot offered will be 220 Patrimonial Shares and in multiples thereof. Corporate CapitalVenture is acting as the lead book manager for the issue.

The company plans to use the net proceeds to increase working capital requirements and general corporate purposes.

Initially established in March 1988, Uma Exports diversified from the export of construction materials to the export of agricultural and commodity products in the year 1997. Since then, the company has been engaged in the marketing and trading of agricultural and commodity products. such as sugar, spices such as dried red chili peppers, turmeric, coriander, cumin seeds, cereals such as rice, wheat, corn, sorghum and tea, legumes, and agricultural feed such as soybean meal and deoiled rice bran cake. It is primarily a B2B trader and specialized in sugar and lentils. The company’s main imports come from Canada, Australia and Burma.

Uma Exports has a track record of delivering revenue and profitability in various markets with healthy cash flows. Total revenue from the company’s operations has grown at a CAGR of 51.10% from fiscal years 2019 to 2021. Its EBITDA has grown at a CAGR of 52.76% from fiscal years 2019 to 2021. , while the updated profit for the year has grown at a compound annual rate of 105.45%. from fiscal years 2019 to 2021.

Among its business strategies, the company focuses on backward integration. The company is in the process of setting up a procurement office in Australia through a wholly owned subsidiary which will allow it to save costs such as freight and import duties and thus improve profitability. Additionally, Uma Exports is continually thriving to initiate several steps to reduce the costs associated with purchasing produce and commodities.

Furthermore, with the injection of additional capital, the company will be in a better position to bid and participate in larger tenders and, as a result, export larger quantities than before. Uma Exports mainly exports sugar to Sri Lanka, the United Arab Emirates and Afghanistan and maize to Bangladesh. In the years 2021, 2020 and 2019, exports constituted 9.53%, 5.42% and 37.64% respectively of its total income, according to the red herring prospectus.

Veranda Learning Solutions IPO:

Chennai-based Veranda Learning Solutions will launch its initial public offering (IPO) on March 29 and allow bidding until March 31. The company’s issue size is added to $200 million rupees. It has a price range of $130 to $137 each. Under the issuance, 75% of the portion is reserved for qualified institutional buyers, while 15% of the size is held for non-institutional buyers and the remaining 10% for retail investors. The offer lot will be 100 capital shares and in multiples thereof. Systematix Corporate Services is acting as the lead book execution manager (BLRM) for the issue. After the initial public offering, Veranda will be listed on the BSE and NSE.

Of the total size of the initial public offering, Veranda plans to use proceeds from $60 million rupees for the repayment or prepayment of certain loans, while almost $It is planned to use Rs 25.12 crore for Edureka acquisition consideration payment or repayment of a bridging loan used specifically for this acquisition. Product of $Rs 50 crore is earmarked for company growth initiatives, meanwhile, a portion will also be used for general corporate purposes.

Veranda is in the business of providing diversified and integrated learning solutions in online, hybrid offline, and blended offline formats to students, aspiring and graduates (collectively, “Students”), professionals, and corporate employees (“Students”). enrolled in their courses through a multitude of career-defining competitive exams, professional courses, exam-oriented courses, short-term refresher and refresher courses. The company offers comprehensive long-term and short-term preparatory courses in a simple and lucid way for students preparing for exams UPSC, State Public Services Commission, Personnel Selection Commission, Banking, Insurance, Railways and the Public Accounting Office. Also, it provides customized short-term training courses, long-term courses, and other corporate courses for our students, meanwhile, it provides these courses to company employees through our B2B offerings.

In its red herring prospectus report, Veranda highlighted that the education sector has been growing at a CAGR of 14% over the past decade, due to India’s demographic profile, rapid urbanization, rising spending on education, the lack of top-quality educational institutions, the highly competitive market, and low penetration of education.

Furthermore, Veranda noted that India’s urban population is growing at a rate of 2.3% per year, compared to India’s overall population growth rate of 1.0%. Urban areas offer better job opportunities and higher wages, while also providing better access to quality education. Consequently, increased urbanization will also result in increased spending on education. India’s growing prosperity and rising disposable income have caused households to spend more on education. During the FY08-FY14 period, average education spending per student in rural areas increased at a CAGR of 19.4%, while in urban areas it increased at a CAGR of 16.6%. Due to demonetization, growth suffered and between fiscal years 2014 and 2018, average education spending per student in rural areas increased at a CAGR of 4.0%, while in urban areas it increased at a CAGR of just 6.0% . IRR Advisory expects average education spending per student to rise from $8,300 in FY18 to $17K in fiscal year 25.

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