In recent months, IPO fever has gripped retail investors in India, especially after the massive success of Bajaj Housing Finance’s listing. With over-subscription in many public issues, securing IPO allotments has become increasingly competitive. One key strategy to improve your chances is to invest in companies that offer preferential allotments under the shareholder category. Let’s dive into this opportunity and review some exciting upcoming IPOs where shareholders of the parent company can have an edge in the allotment process.
What is the Shareholder Category in IPOs?
When a subsidiary company launches its IPO, it often allocates a specific percentage of shares to the shareholders of its parent company. By owning even one share of the parent company, an investor becomes eligible to apply in both the retail and shareholder categories, significantly increasing the chances of allotment.
A great example of this was seen during the Bajaj Housing Finance IPO, where shares worth ₹500 crores were reserved for the shareholders of its parent companies, Bajaj Finance and Bajaj Finserv. While the retail portion of the IPO was subscribed 7.41 times, the shareholder category saw 18.54 times the bids, offering more options for investors.
Top Upcoming IPOs Offering Shareholder Allotment
If you’re keen on increasing your chances of securing an allotment, it’s worth considering the following IPOs of subsidiary companies where shareholder reservations are expected. Here’s a breakdown of the major upcoming IPOs:
1. NTPC Green Energy IPO
NTPC’s subsidiary, NTPC Green Energy, is preparing to launch a massive ₹10,000 crore IPO. This will have a 10% reservation for existing shareholders of NTPC Limited. Given NTPC’s established brand in India’s energy sector, this IPO is likely to attract considerable attention, and buying NTPC shares now could give you a better shot at securing allotment.
2. HDB Financial Services IPO
HDFC Bank’s non-banking subsidiary, HDB Financial Services, has cleared plans for a ₹2,500 crore IPO, which will also include an Offer for Sale (OFS) by existing shareholders. HDFC Bank shareholders are expected to benefit from a reserved quota in this IPO. As HDFC Bank is a well-regarded financial institution, holding its shares might be a good idea for those aiming to secure HDB Financial Services shares.
3. HDFC Credila Financial Services IPO
Another HDFC Group company, HDFC Credila Financial Services, the leading educational loan provider in India, is also preparing to go public. The IPO is expected in 2025, and shareholders of HDFC Limited will likely be eligible for special allotment. With education financing on the rise, this IPO could see significant demand, making early investment in HDFC Limited shares a strategic move.
4. Ather Energy IPO
Ather Energy, known for its cutting-edge electric scooters, is planning to launch a ₹3,100 crore IPO. Backed by Hero MotoCorp, existing shareholders of Hero could gain an advantage when applying for shares in Ather’s public offering. As electric vehicles gain more traction in India, this IPO holds great promise.
5. Hero FinCorp IPO
Hero FinCorp, the financial services arm of Hero MotoCorp, has filed papers for an IPO worth ₹3,688 crores. With ₹2,100 crore as new issue shares and ₹1,568 crore raised via OFS, existing shareholders of Hero MotoCorp can expect a reserved portion of the IPO. Considering Hero’s stronghold in the Indian market, its financial arm is expected to attract substantial attention.
6. SJVN Green Energy IPO
SJVN Green Energy, the renewable energy subsidiary of PSU SJVN, is gearing up for its IPO. With the government’s focus on renewable energy, this IPO could perform well. As per market speculation, there will be a shareholder reservation for SJVN shareholders, giving those who hold SJVN shares an extra chance for allotment.
7. Bharat Coking Coal IPO
Coal India’s subsidiary Bharat Coking Coal is also expected to go public soon. This company plays a critical role in supplying coking coal to the steel industry, and its listing could streamline operations while boosting investor interest. Holding Coal India shares could allow you to apply under the shareholder category for this upcoming IPO.
8. Central Mine Planning and Design Institute (CMPDI) IPO
CMPDI, the mining consultancy arm of Coal India, is also preparing for an IPO. The consultancy specializes in mineral exploration and mining infrastructure, making it an important player in India’s mining landscape. Similar to Bharat Coking Coal, holding Coal India shares can potentially give you an edge in the IPO allotment process.
9. Asirvad Micro Finance IPO
Asirvad Micro Finance, a subsidiary of Manappuram Finance, has received approval to raise ₹1,500 crores through an IPO. Holding shares in Manappuram Finance could allow you to apply under the shareholder category, giving you a higher chance of securing an allotment in this promising microfinance IPO.
10. Canara Robeco Asset Management IPO
Canara Robeco Asset Management Company (AMC), a joint venture between Canara Bank and Robeco Group, is expected to launch its IPO in the fourth quarter of FY25. Canara Bank shareholders may benefit from a reserved quota in the IPO. As mutual funds continue to grow in popularity in India, this IPO is expected to generate strong interest.
11. Belstar Microfinance IPO
Muthoot Finance’s subsidiary, Belstar Microfinance, has received SEBI approval to raise ₹1,000 crores via fresh issue and ₹300 crores through OFS. Muthoot Finance shareholders could gain early access to this IPO, boosting their chances of securing shares.
Conclusion
Investing in parent companies of subsidiaries preparing for IPOs can be a smart way to increase your chances of allotment. By holding even, a single share of these parent companies, you gain access to the shareholder category, which often has fewer applicants and thus offers better chances of securing allotment. Keep an eye on these upcoming IPOs and consider investing in the parent companies to optimize your investment opportunities.
