Notwithstanding the sharp rally in key benchmark indices over the last two months, the primary market is still waiting for clear signals on the sustainability of the current bull run, given the economic uncertainty.

Despite the revival in market sentiments, Inox Green Energy Services, Uma Converter, Radhe Developers, and Nandan Terry Towels have withdrawn their initial public offer plans in the first quarter of this fiscal, while three applications have been returned to the book-running lead managers for an update on the company’s information.

About 63 companies have filed draft papers with the SEBI this year, and another 71 companies that received approval from the market regulator are waiting for the opportune time to tap the market. In all, 17 companies, including the LIC, have raised about ₹41,140 crore from the IPOs this year.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said most IPOs issued at fancy valuations are quoted below their issue prices and the present market rally, led by stocks with good earnings visibility, is not good enough for the revival of the IPO market.

After incurring huge losses in the four recent large IPOs, investors have turned cautious and are unwilling to bet on listing gains. LIC and Paytm IPOs, which were priced at ₹949 and ₹2,150 a piece at IPO, were traded at ₹686 and ₹772 on Friday, while those of Zomato and Policybazzar closed down at ₹61 and ₹554 a share against their IPO price of ₹76 and ₹980.

Last year, 63 companies raised a bumper ₹1,18,723 crore, while in 2020, only 15 companies raised ₹26,613 crore.

Hopes galore

Nevertheless, three companies — Prem Watsa’s Fairfax-backed Go Digit General Insurance, Rakesh Jhunjunwala-backed Concord Biotech and Balaji Solutions — have filed papers with the SEBI this month to cumulatively raise ₹7,500 crore through initial public offerings.

While Go Digit General Insurance and Concord Biotech are looking to raise ₹5,000 crore and ₹2,000 crore, respectively, Balaji Solutions will mop up ₹400 crore from the capital market.

Rajnath Yadav, Research Analyst, Choice Broking, said the secondary market has been vibrant with easing inflation and a resumption in FPI inflows.

“While this has raised the hopes of a revival in the primary market activities, we remain cautiously optimistic about the future momentum in the equity markets given the uncertainty surrounding the geopolitical events and sustained higher inflation levels in the key European markets,” he added.

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After pulling out ₹2.17 lakh crore in the first six months of this year, FPIs have ploughed back ₹49,470 crore since July. Data on NSDL showed that FPIs bought equities worth ₹44,481 crore till August 19 and ₹4,989 crore in July.

The main trigger for the sustained FPI buying in India was the steady fall in the dollar index from above 109 in July-end to around 105 recently. But on Friday, the dollar index again rose, and crossed 107. If this trend continues, the capital inflows might be impacted, said Vijayakumar.