Primary market is buzzing with a flurry of IPOs, led by Tata Technologies, but retail investors and high net worth individuals (HNIs) are equally prepared, as they pour in money in almost all the offerings that are open currently.

Tata Technologies, the first one to hit the capital market from Tata group in 20 years since TCS, was the major attraction followed by Gandhar Oil Refinery. Within a few minutes, both the IPOs (the former in less than 40 minutes and the latter in under 60 minutes), drew interest from both retail as well as non-institutions (HNIs). At the end of the day, Tata Technologies was subscribed 6.55 times and Gandhar Oil 5.5 times.

Quota for Tata Motors shareholders saw strong response in Tata Tech IPO who subscribed 9.31 times, while HNIs already bid over 11.69 times and retail investors 5.43 times; employees portion received 1.10 times and Qualified Institutional Buyers (QIBs), who generally bid on the last day, were also active by subscribing over 4 times.

Shivani Nyati, Head of Wealth, Swastika Investmart Ltd, said, “Tata names carry a legacy of trust, a sentiment underscored by the remarkable response to Tata Technology’s IPO — the first from the Tata Group in 19 years. The overwhelming investor interest is a testament to the enduring faith in the Tata brand. This confidence is further buoyed by a robust business model and compelling valuations, aligning seamlessly with investor expectations and contributing to the IPO’s success.”

Similarly, the IPO of Flair Writing Industries was subscribed fully by noon and at the end of the day by 2.17 times, thanks to retail investors (2.86 times) and HNIs (2.78 times).

For Gandhar Oil, the HNIs portion was subscribed 7.70 times, retail investors 6.89 times and QIBs 1.35 times.

IREDA continues success run

Indian Renewable Energy Development Agency, which launched IPO on Tuesday and witnessed a healthy response, continued to be a hit with investors on Wednesday as well. On Day 2, it received bids for 4.56 times. The quota for non-institutional investors received 7.74 times subscription while the retail investors’ portion got subscribed 4.25 times and QIBs were subscribed 2.69 times.

Earlier, Paras Defence and Defence Technologies was the trendsetter, as the IPO was subscribed within a few minutes. Other IPOs that saw strong response immediately included Plaza Wires and Aeroflex Industries. However, according to analysts, those issues were much smaller in the range of ₹71 crore to ₹351 crore.

According to analysts, this time around, almost all the IPOs have come with decent valuations compared with comparable listed players. For instance, Tata Technologies’ P/E at the upper end of the price band ₹500, is 28.8 times as against L&T Technology (37.5 times), Tata Elxsi (66.5 times) and KPIT Technologies (76.6 times). Flair Writing commands a PE of 27.1 as against Cello World (62.6), Kokuyo Camlin (60.9) and Linc (26.8) times. Similarly, the IREDA offer price (₹30-32) is cheaper than REC and PFC.

Besides valuation, analysts also attribute the steep grey market premium as a major reason for the subscription. According to them, Tata Tech commands a premium of over 70 per cent, Gandhar Oil 41 per cent and IREDA 21 per cent. Flair Writing is trading 20 per cent over its IPO price of ₹304.

Investing based on GMP alone is a dangerous trend, cautioned analysts.

Shyam Sekhar, a market veteran, in his “X” post said, ”If there is always a GMP in IPOs, the IPO process must be tweaked to ensure that money goes to the issuers. An auction procedure or online IPO which does transparent price discovery is the way to go. The current method of price discovery is essentially rigged by financing and grey market making.”