IPO Market: 28 cos secure Sebi approval to place Rs 45,000-cr worth of IPOs in April-July FY23

Sebi has approved 28 companies to raise funds totaling Rs. 45,000 through initial public offerings (IPOs) during the April-July 2022-23 period, in which 11 debutants have already raised over Rs. 33,000.

Companies that have secured regulatory approval include lifestyle retail brand FabIndia; Bharat FIH, a subsidiary of FIH Mobiles and a Foxconn Technology Group;

supply chain solutions; Blackstone-backed Aadhar Housing Finance; Macleods Pharmaceuticals and Kids Clinic India, which runs the super-specialized mother and baby care chain Cloudnine.

These companies have yet to announce the start date of their IPOs and are waiting for the right time to list their issues as current market conditions are challenging, merchant bankers said. “The current environment is challenging and companies with permits are waiting for the right window to start the first share sales. In fact, many of them have completed the roadshows and are waiting for the right timing,” said Prashant Rao, Director and Head Equity Capital Markets, Anand Rathi Investment Banking.

According to the Securities and Exchange Board of India (Sebi) data, a total of 28 companies received the regulator’s approval to enter the IPO route for fundraising in the April-July 2022-23 period. Together these companies are expected to collect Rs 45,000 crore.

So far in the current fiscal year, 11 companies have gone public to raise Rs 33,254 crore. Of this, a lion’s share (Rs 20,557 crore) was raised through the public issuance of

().

All of these companies entered the primary market in April-May and not a single public offering was issued after May, indicating a dry spell in the IPO market.

This comes after as many as 52 companies entered the primary market to raise a record Rs 1.11 crore over the entire 2021-22 period. The impressive fundraising could be due to a string of public offerings from loss-making new-age tech startups, strong retail participation, and huge stock price gains.

The lack of appetite for going public in the current fiscal year could be attributed to a sharp correction in the secondary market, a disastrous performance by new digital companies, etc

and , and a poor post-listing performance by LIC negatively impacting sentiment, said VK Vijayakumar, chief investment strategist at .

Rao of Anand Rathi Investment Banking also said investors are wary of new issues due to market volatility and certain pricing issues.

However, Abhijit Tare, MD and CEO of Motilal Oswal Investment Advisors believes that markets have just recovered from a mathematical low and, more importantly, a sentimental low from last quarter and few companies will attempt to bounce back to approach the markets.

Some of the IPOs will come through in the next 2-3 months based on the merits of their proposals, Tare said, adding that good fundraising is expected for the remainder of the fiscal year.

“With good quarterly results and some favorable economic data, we believe the second half of this fiscal year could present some windows for trouble and an opportunity for quality, reasonably priced companies to start their IPOs,” Rao said.

Interestingly, over the past two months, there has been a sudden rush among companies to file preliminary IPO papers with Sebi. From June to July, a total of 15 companies including Sula Vineyards, Allied Blenders and Distillers, Utkarsh Small Finance Bank and Sai Silk Kalamandir approached Sebi with their designs to raise funds through initial share sales.

“A lot of discussions take place in the private sphere. Many small town and urban promoters who have done a fantastic job growing their business but never considered monetizing their efforts are now preparing to relocate. So we see a lot of applications being filled out at the regulatory authority,”

Tare from investment advisers said.