IPO frenzy: 35 firms might increase Rs 80,000 crore in Q3

Mumbai: A flood of preliminary public choices (IPOs) is ready to hit the market between October and December.

As many as 35 companies are planning to lift a file Rs 80,000 crore within the third quarter if the market stays steady, bankers stated. As compared, the earlier file for a calendar 12 months was in 2017 when 36 firms raised Rs 67,147 crore.

Paytm, Aadhar Housing Finance, Star Well being & Allied Insurance coverage, Policybazaar, Emcure Pharma, Adani Wilmar, and Nykaa are amongst these planning to lift between Rs 4,000 crore and Rs 16,600 crore in IPOs. Paradeep Phosphates, Vedant Fashions, CMS Infosystems, and Northern Arc are additionally anticipated to faucet the market to lift Rs 2,000-2,500 crore within the December quarter, in keeping with banking sources.

About 14 firms, together with Paradeep Phosphates, Go Airways, Ruchi Soya Industries, Arohan Monetary Providers, Utkarsh Small Finance and Fincare Small Finance, have already obtained approval from capital markets regulator, Securities and Trade Board of India (Sebi), to lift round Rs 22,000 crore, whereas an extra 64 firms have filed their draft purple herring prospectuses.

Market members stated they weren’t nervous about more cash being funnelled into the first market or diverted from the secondary market, which is hovering close to record-high ranges.

FPI Inflows

“With the form of points lined up, traders – together with establishments – would deploy contemporary cash into IPOs reasonably than chasing the identical listed shares, and actually, it could cease fuelling the asset bubble within the secondary market,” stated V Jayashankar, head of fairness capital markets, Kotak Funding Banking.

“Although there may be plenty of liquidity available in the market, traders will probably decide and select from a big pool of firms which might be planning to hit the first market within the subsequent few months,” he added.

Policybazaar and Nykaa are anticipated to launch their IPOs this month to lift Rs 6,000 crore and Rs 4,000 crore, respectively. Chennai-based standalone medical insurance firm Star Well being additionally plans to launch its Rs 7,000 crore IPO later this month.

MobiKwik, Paradeep Phosphates, CMS Infosystems, Northern Arc, Sapphire Meals, and Tarsons Merchandise can also launch their IPOs in October, whereas digital funds agency Paytm expects to checklist in November. The homegrown fintech agency, backed by China’s Ant Group and Japan’s SoftBank, has filed for a Rs 16,600 crore IPO that may probably be the biggest ever in India. It’s pending regulatory approval.

“The IPO euphoria is prone to proceed within the coming months with ample liquidity, which may come from all sections of traders, together with home and international establishments,” stated Dharmesh Mehta, managing director and chief govt of DAM Capital. “Nevertheless, each situation might not get a very good response,” Mehta cautioned.

To this point this 12 months, 42 firms have hit the first market, elevating a file Rs 69,676 crore, knowledge from major markets tracker Prime Database confirmed.

International portfolio traders (FPIs), which have invested a web Rs 38,000 crore, contributed to almost 55% of the funds raised within the IPOs to this point in 2021.

Out of 24 IPOs listed since April 1, 18 are buying and selling above their supply value, whereas solely six have seen detrimental returns.

Paras Defence, Ami Organics, Tatva Chintan Pharma, GR Infraprojects, Clear Science and Macrotech Builders have actually doubled from their preliminary supply value.

Fund managers stated the IPO rush will appeal to extra influx into the capital markets due to renewed curiosity from traders.

“Any new firm with good enterprise and an inexpensive value will probably appeal to sturdy flows from mutual funds, insurance coverage firms, FPIs, and even from retail,” stated Gopal Agrawal, fund supervisor at HDFC Mutual Fund, including {that a} sturdy IPO pipeline doesn’t, nevertheless, have any materials affect on the inventory market as a result of the MF business is already witnessing important inflows by Systematic Funding Plans and new funds.