Thursday is a busy day for the IPO market, with three IPOs namely Bikaji Foods International, Global Health and Fusion Micro Finance being available for bidding. All the three IPOs have received ‘subscribe’ ratings from brokerages, but analysts prefer Bikaji Foods among the three. They also see better chances of listing gains in case of the ethnic snacks maker.
Astha Jain of Hem Securities prefer Bikaji Foods, followed by Global Health and Fusion Micro Finance.
Jain said Bikaji Foods’ asking valuations is a bit on a higher side, but she still prefers it, thanks to strong brand recall, its positioning in the ethnic snacks market and growth plans. In case of Global Heath, she said low occupancy rate is a concern, but it is a decent candidate overall and could deliver well in the long-term. She sees limited listing gains for Global Health.
In case of Fusion Micro Finance, financial ratios are solid and the overall fundamentals are good, but there are industry-related concerns, Jain said.
Narottam Dharawat of Dharawat Securities also prefers Bikaji Foods International among the three. He sees better chances of Bikaji Foods delivering a listing pop. “It’s listing could surprise on the upside,” he said.
As far as Angel One is concerned, the brokerage said investors looking for listing gains can look at Bikaji Foods. Global Health and Fusion Micro Finance are good opportunities for long term investors.
Considering Global Health’s strong brand recall, market position and healthy financial performance, Angel One believes the multi-speciality tertiary care provider can create a good opportunity for long term investing.
For Fusion Micro Finance, it said while the NBFC saw growth in top line, it posted fall in profits due to spill over effects of the pandemic, and expansion spending from FY20 to FY22. Recovery has been strong for the company as indicated in Q1FY23 results, it said while suggesting the IPO for long term investors.
Meanwhile, Arijit Malakar, Head of Research for Retail at Ashika Group finds Global Health IPO reasonably valued.
“Bikaji IPO is expensively valued and leaves little room for upside amid a volatile market. Meanwhile, since rural India is under pressure, there are headwinds in the microfinance industry and hence investors should remain cautious over the Fusion Micro Finance issue,” he Malkar said.
On its Day 2 of the bidding process, the IPO of Fusion Micro Finance was subscribed 17 per cent by 11.55 am. Global Health IPO was subscribed 3 per cent while Bikaji Foods International IPO was subscribed 20 per cent.
At the upper limit of the price band Rs 350-368, the Fusion Micro Finance IPO was demanding 1.9 times adjusted FY22 book value per share (BVPS) and 168 times FY22 diluted EPS. Nirmal Bang has subscribe rating on the issue. Swastika Investmart recommended a ‘subscribe’ rating but said the issue is only for high-risk investors with a long-term view. Angel One has a neutral rating on the issue. Hem Securities Astha Jain said the issue is for investors with risk appetite.
In case of Bikaji, analysts said the asking IPO valuations are expensive but they largely have a ‘subscribe’ rating on the issue due to Bikaji’s brand recall and better revenue and PAT growth than peers over the last two years.
“BFIL, with its strong market position across its diversified product portfolio, strong distribution, strategically manufacturing facilities, strong brand visibility and consistent financial performance is in a good position with healthy visibility going ahead,” said LKP Securities in a note.
Choice Broking has assigned a ‘Subscribe with Caution’ rating on the issue. Geojit finds the asking valuations expensive but has advised ‘subscribe’ on the issue, considering Bikaji’s consistent top-line growth, industry leading position, future expansion plans, new product launches, investments in strengthening the brand recall and good future prospects
In case of Global Health, Geojit has assigned a ‘subscribe’ rating from a short to medium term basis. Choice Broking also has assigned a ‘subscribe’ recommendation to the share sale.
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