Comments
The year 2023-24 is poised to be the best six-month period prior to the general elections for initial public offerings (IPOs) in two decades.
Historically, IPO activity has been abysmal six months prior to the general elections (see table). This time around the mood has been different.
A dozen companies have tapped the market in October and November, mopping up over ₹14,000 crore. The mop-up is higher than the combined collections for four previous six-month periods before the elections. The BJP’s recent wins in three State elections may further augment this tally, with market observers expecting another 8-12 companies tap the market in the next three months, given favourable market conditions and domestic liquidity.
December may see half a dozen companies – India Shelter Finance, EPack Durable, DOMS Industries, Happy Forgings, Muthoot Microfin and Jana SFB – hit the market for their public share sales, said people in the know. Together these companies could raise over ₹7,000 crore.
Other firms
Entero Healthcare Solutions, Medi Assist Healthcare and Jyoti CNC Automation are among those that are yet to get SEBI approval but hoping to launch by January, said bankers. INOX India and Stanley Lifestyles, which got a regulatory nod on Tuesday, may also look to come to the market.
“The State election results have added further momentum to an existing robust IPO market. With secondary markets at an all-time high and good performance by recent listings, the stage is set for more companies to tap the market this month and early part of next year,” said Pranjal Srivastava, partner, investment banking, Centrum Capital.
Regulatory nod
In total, 33 companies still have valid regulatory approval, which could culminate in a fundraise of over ₹34,000 crore, according to PRIME Database. Another 34 companies are awaiting the regulator’s nod for their offer documents to mop up ₹38,000 crore.
“The robust IPO activity in October and November is unlike what we have historically seen in the six-month periods prior to the general elections. The incumbent government’s performance in the just-concluded State elections has been taken extremely favourably by the market, and the resulting buoyancy may result in a few more issues hitting the market till January or February,” said Pranav Haldea, Managing Director, PRIME Database Group.
The IPO mart was in the spotlight in November, with a host of IPOs such as Tata Technologies, Gandhar Oil Refinery, IREDA, and Flair Writing Industries seeing robust demand from investors, record applications and stellar listings subsequently.
“The surge in IPO activity can be attributed to the eagerness of companies to tap into the capital market before the Lok Sabha elections, coupled with robust economic activity and positive sentiment from both domestic and foreign investors towards India. This momentum is likely to continue well into 2024,” said Mahavir Lunawat, Managing Director, Pantomath Capital Advisors.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.