Bengaluru’s non-tech companies set for IPOs

India’s information and software technology capital will see a slew of non-tech companies hit the capital markets over the next few months, encouraged by the bull run under the Modi government. Tech ventures are unlikely to join in because those who need significant capital are able to raise money in private markets. Bengaluru-based Cafe Coffee Day, HR staffing and consultancy firm Teamlease, Biocon’s clinical research arm Syngene, VRL Logistics, and cancer care specialists HCG, are all in various stages of readying for a possible initial public offer (IPO) beginning next fiscal.

While, VRL Logistics filed a draft offer document with market regulator Sebi in December, Biocon CMD Kiran Mazumdar-Shaw recently announced that Syngene would be listed in the first half of 2015-16. The other firms are said to be in the process of filing their draft prospectus with Sebi.

Mphasis founder and former Citibank honcho Jerry Rao is planning to list his real estate firm Value Budget Housing Corporation, in which HDFC, Carlyle, and IFC have picked up stake, over the next 18 months. Shriram Properties is looking at a similar time period for an IPO.

In the ongoing fiscal, two city-based non-tech firms, Wonderla Holidays and Snowman Logistics, have had successful IPO listings. Amusement park firm Wonderla’s share price is trading at Rs 344, up 175% over its issue price of Rs 125 in May this fiscal. Likewise, Snowman Logistics’ share price is trading up 105% at Rs 96, over its September list price of Rs 47.

It’s been almost a decade since Bengaluru has seen a pure-play software company list on the bourses. The last well-known IT/technology firm to list was Ashok Soota and Subroto Bagchi co-founded Mindtree, in 2006. “The days of service-led IT company IPOs are over. You’re not going to see another Infosys or Wipro like company being listed,” said H V Harish, partner, Grant Thornton India.

And, the reason is that over the last decade most of the technology firms that have emerged in the city have been in the internet domain and in technology products, added Jacob Mathew, MD and co-founder of investment banking firm Mape. “Many of these companies have raised private capital, with some individual fund raisings being far bigger than what many companies raise in an IPO,” said Mathew.

This article appeared in The Times Of India on 27th January, 2015.