Notwithstanding the gyration in the secondary market, about ten companies are looking to raise ₹20,000 crore in December through the initial public offering this month.
The celebration in the primary market will start with eight IPOs opening for subscription in the coming week. The week will start with Vishal Mega Mart and Sai Life Sciences’ mega IPOs of ₹8,000 crore and ₹3,043 crore opening for subscription on Wednesday. The online payments platform One MobiKwik Systems provider plans to raise ₹700 crore through its IPO on Wednesday, while Rekha Jhunjhunwala-backed Inventurus Knowledge Solutions will open on Thursday. This apart, five companies will raise ₹145 crore next week through an IPO on the SME platform.
Gopinath Natarajan, CEO Asset Management, Geojit Financial Services, said corporates mop of ₹1.33 lakh crore so far this year is the highest ever in India.
Expensive valuation in the secondary market and excess liquidity with institutional investors have created strong appetite for public issues this year amid quality companies issuances, he added.
FPIs investment
The buoyancy in the primary market also results from huge foreign portfolio investors’ participation in IPOs and qualified institutional buyers, who are also booking profits t in the secondary markets.
Last month, FPIs raised ₹17,704 crore through IPOs and other issuances and sold shares worth ₹39,516 crore in the secondary market.
Overall, in the first 11 months of this year, they have invested ₹1.03 lakh crore through the primary market and sold shares worth ₹1.19 lakh crore in equity markets.
High valuations
The prevailing high valuations in the equity markets are one reason for the sudden change in the investment pattern of FPIs. Some of the foreign investors are also realigning their portfolios to include new businesses at attractive valuation valuations, betting big on overvalued old economy stocks.
Manish Bhandari, CEO and Portfolio Manager at Vallum Capital Advisors said FPIs have chosen to reshuffle portfolios to buy QIPs and IPOs in order to buy new emerging businesses that will represent the coming India.
They also became net buyers of equities in Deccember, worth ₹24,000 crore. This is a reflection of the strength of India’s economy, the lesser depreciation of rupee against the dollar compared to other developed and emerging market currencies, and their expectation of India emerging as a clear winner in the Trump 2.0 strategy, he said.
Vaibhav Porwal, co-Founder of Dezerv, said the favourable movement in the IPO market is driven by the buoyancy in the equity markets, which have shown strong support for new listings.
Promoters are strategically positioning themselves to unlock the inherent valuations of their subsidiaries, capitalising on investor interest and market momentum, he added.