Financial services firms line up `55,000-cr float

Mumbai, June 13: With payments major Paytm's board reportedly approving a bumper share sale plan running north of Rs 22,000 crore, the IPO market is set for a big days, as over a dozen financial services players, including fintechs, are set to mop up over Rs 55,000 crore this fiscal from the market, according to investment bankers.

With more than a dozen insurance, asset management, commercial banking, non-banks, microfinance, housing finance and payment bank players already filing draft documents with the market regulator Sebi for public offerings, the financial services sector is set to dominate the primary issues or initial public offerings (IPOs) over the coming months.

Some of those who have already filed the draft red herring prospectus (DRHPs) with the Sebi include Aadhar Housing Finance (Rs 7,500 crore), Policy Bazaar (Rs 4,000 crore), Aptus Housing Finance (Rs 3,000 crore), Star Health Insurance (Rs 2,000 crore), Aditya Birla Sun Life AMC (Rs 1,5002,000 crore) Arohan Financial Services (Rs 1,800 crore), Fusion Microfinance (Rs 1,700 crore), Fincare Small Finance Bank (Rs 1,330 crore), Tamilnad Mercantile Bank (Rs 1,000-1,300 crore), Medi Assist (Rs 840 crore) and Jana Small Finance Bank (Rs 700 crore).

The board of the biggest payments bank Paytm has reportedly cleared a more

than Rs 22,000-crore IPO. Together, these financial services companies are set to garner around Rs 55,000 crore from the public.

If materialised, the Paytm issue will be the largest IPO ever in the country, eclipsing the hitherto largest issue— the Rs 15,000-crore share sale by the government in national miner Coal India in October 2010, says investment bankers, who wished not to be quoted.

Investment bankers and analysts consider the IPO boom to be reflective of the ongoing bull run and advice retail investors to be cautious while parking their money in new firms.

V. K. Vijayakumar, chief investment strategist at Geojit Financial Services in Kochi, said the performance of the IPO market usually has a strong correlation to the performance of the secondary market. "If the stock market is bullish, it attracts a large number of investors into IPOs.

Particularly, new investors lured by high potential profits, get attracted to new offers and the IPO market has always done well during market booms, Vijayakumar said.

Rupen Rajguru, head of equity investments and strategy at global wealth management firm Julius Baer in Mumbai, concurs and cautions retail investors to study the valuations carefully before investing as the market is a bit over-heated now.

"The current IPO market buoyancy is expected to continue into the next few quarters. IPOs are in fact playing on the financialisation of savings theme, which is a big structural shift in the country," Rajguru said.

Apart from Paytm, Policy Bazaar is looking to float a Rs 4,000-crore offering, industry sources said. Two small finance banks

Jana SFB and Fincare SFB— have filed their draft papers with the Sebi.

Aditya Birla Sun Life AMC is looking to go public with Rs 1,500-2,000 crore offering. From the insurance sector, there are two IPOs: Westbridge Capital and Rakesh Jhunjhunwala-backed Star Health & Allied Insurance, and the largest health benefits administrator Bengalurubased Medi Assist TPA.

Microfinance players Arohan Financial Services, Fusion Microfinance and digital debt platform Northern Arc are also eyeing the IPO market.