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The initial public offering juggernaut will continue over the next two months with 14 companies lining up to raise about ₹25,000 crore. Among the large issues included Star Health and Allied Insurance and Adani Wilmar, which plan to raise about ₹10,000 crore, and CMS Infosystem and Mobikwik, together will mop up ₹4,500 crore.
Strong appetite
Tarson Products and Healthium Medtech will hit the market with ₹4,000 crore issues while RateGain Technology and Skanray Tech eye ₹2,200 crore from capital market. Investors’ appetite for IPO has been strong aided by tremendous listing gain. Setting a new record, about 47 companies have raised ₹86,650 crore through initial offerings this year. Corporates are expected to raise over ₹1-lakh crore through IPO in Samvat 2078 given the positive sentiments.
The biggest among recent IPOs included Zomato, PolicyBazaar, Power Grid Infrastructure Investment Trust, Gland Pharma, Sona Comstar and Nuvoco Vistas Corporation.
Country’s largest IPO, Paytm’s ₹18,300-crore IPO was subscribed 48 per cent on Tuesday, with one more day to go for bidding. The ₹2,073-crore IPO of Sapphire Foods India Ltd, which operates KFC and Pizza Hut outlets, was subscribed 49 per cent on Day 1 of public subscription.
Frenzy to continue
Piyush Nagda, Head (Investment Products), Prabhudas Lilladher, said the IPO frenzy will continue for few more quarters as the future pipeline is very strong. The dip of benchmark indices in short term will not change the IPO trend, he said.
However, investors should evaluate and choose investment in IPO companies carefully and not apply blindly for listing gains particularly those of new age high-growth but loss-making companies should be evaluated with a long-term horizon and not merely for listing gain, he added. Mohit Nigam, Head (PMS), Hem Securities, said the bull run in the secondary market, which was one of the best in recent times, was largely led by listing of new age technology companies. Though there has been some correction in secondary markets, the bull run will continue in coming years led by the Government support to several sectors such as infrastructure, renewables, manufacturing and digitalisation.
Binod Modi, Head Strategy, Reliance Securities, said given the visible improvement in capacity utilisation for various industries in the backdrop of sustained pickup in economic activities, private capex is expected to pick up and several companies are likely to tap the market with IPO for growth capital. Despite high valuation, domestic equities continue to look promising and IPO market is likely to remain buoyant in coming months, he added.
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