Following Paytm’s IPO fiasco, Sebi has grown cautious while declassifying initial stock sales as it returned preliminary paper from half a dozen companies, including Oravel Stays, which operates hotel chain OYO, in over two months.
Following Paytm’s IPO fiasco, Sebi has grown cautious while declassifying initial stock sales as it returned preliminary paper from half a dozen companies, including Oravel Stays, which operates hotel chain OYO, in over two months.
These companies were asked to resubmit their draft Red Herring Prospectus (DRHP) with certain updates.
These companies were asked to resubmit their draft Red Herring Prospectus (DRHP) with certain updates.
Aside from OYO, the companies whose draft papers have been returned by the regulator are — Go Digit General Insurance Ltd, a company backed by Canada-based Fairfax Group; domestic cell phone maker Lava International; B2B payment and service provider Paymate India; Fincare Small Finance Bank India and integrated services company BVG India according to data analysis with Sebi.
Aside from OYO, the companies whose draft papers have been returned by the regulator are — Go Digit General Insurance Ltd, a company backed by Canada-based Fairfax Group; domestic cell phone maker Lava International; B2B payment and service provider Paymate India; Fincare Small Finance Bank India and integrated services company BVG India according to data analysis with Sebi.
The six companies submitted their preliminary initial public offering (IPO) papers to Sebi between September 2021 and May 2022, and their papers were returned from January to March (until March 10).
The six companies submitted their preliminary initial public offering (IPO) papers to Sebi between September 2021 and May 2022, and their papers were returned from January to March (until March 10).
Together, these companies hoped to at least raise some €12,500 crores.
Together, these companies hoped to at least raise some €12,500 crores.
Sebi has become more rigorous in its approach, giving the green light to IPOs after investors lost their money in some of the high-flying early 2021 stocks, and the average time it took market regulators to approve one, according to data compiled by Primedatabase.com IPO in 2022 was 115 days.
Sebi has become more rigorous in its approach, giving the green light to IPOs after investors lost their money in some of the high-flying early 2021 stocks, and the average time it took market regulators to approve one, according to data compiled by Primedatabase.com IPO in 2022 was 115 days.
“Following the post-listing IPO fiasco of new-age digital companies such as Paytm, Zomato and Nykaa, which saw investors suffer heavy losses, Sebi has tightened IPO approval norms. This is to be welcomed and in the interests of investors,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“Following the post-listing IPO fiasco of new-age digital companies such as Paytm, Zomato and Nykaa, which saw investors suffer heavy losses, Sebi has tightened IPO approval norms. This is to be welcomed and in the interests of investors,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Ultimately, however, investors must use common sense and avoid high-priced issues when applying for IPOs, he added.
Ultimately, however, investors must use common sense and avoid high-priced issues when applying for IPOs, he added.
One97 Communications, the parent company of digital payments company Paytm, made a disappointing stock market debut in November 2021 €18,300 crore IPO was the largest on Dalal Street after Coal India. The digital payments company’s stock was still trading 72 percent below its issue price.
One97 Communications, the parent company of digital payments company Paytm, made a disappointing stock market debut in November 2021 €18,300 crore IPO was the largest on Dalal Street after Coal India. The digital payments company’s stock was still trading 72 percent below its issue price.
Moolaah Founder and CEO Prakhar Pandey believes that Sebi’s latest move sends a strong message to commercial bankers to fully comply with the information required to prepare the draft prospectus and disclose all required key information in a timely manner, rather than a full back-and-forth between the bankers, IPO-bound firms and regulators.
Moolaah Founder and CEO Prakhar Pandey believes that Sebi’s latest move sends a strong message to commercial bankers to fully comply with the information required to prepare the draft prospectus and disclose all required key information in a timely manner, rather than a full back-and-forth between the bankers, IPO-bound firms and regulators.
Sebi used to give most companies grace periods to submit their full compliant documents, which used to result in a long gestation period of up to four months last year. This could create a large distortion in terms of the IPO price range, he added.
Sebi used to give most companies grace periods to submit their full compliant documents, which used to result in a long gestation period of up to four months last year. This could create a large distortion in terms of the IPO price range, he added.
So far this year, only nine companies have approached Sebi with their draft IPOs amid extremely volatile market conditions and nervous investor sentiment.
So far this year, only nine companies have approached Sebi with their draft IPOs amid extremely volatile market conditions and nervous investor sentiment.
Additionally, only two companies — Divgi Torqtransfer Systems and Global Surfaces — have taken their first share sales public for a raise €730 crore since the beginning of the year during Udayshivkumar’s €66 crore IPO to open next week.
Additionally, only two companies — Divgi Torqtransfer Systems and Global Surfaces — have taken their first share sales public for a raise €730 crore since the beginning of the year during Udayshivkumar’s €66 crore IPO to open next week.
This came after 38 companies merged €59,000 crore through IPOs in 2022, which was much lower than €1.2 lakh crore was raised by 63 companies in 2021, the IPO year in a decade.
This came after 38 companies merged €59,000 crore through IPOs in 2022, which was much lower than €1.2 lakh crore was raised by 63 companies in 2021, the IPO year in a decade.
The total collection in 2022 would have been much less if it hadn’t been €20,557 crore-LIC public offering, accounting for no less than 35 percent of the total amount raised during the year.
The total collection in 2022 would have been much less if it hadn’t been €20,557 crore-LIC public offering, accounting for no less than 35 percent of the total amount raised during the year.
Investors remained nervous throughout 2022 amid recession fears and rising interest rates amid rising inflation.
Investors remained nervous throughout 2022 amid recession fears and rising interest rates amid rising inflation.
Experts assume that some activities on the IPO front could only be seen in the second half of the 2023/24 financial year.
Experts assume that some activities on the IPO front could only be seen in the second half of the 2023/24 financial year.
“A variety of factors such as rising interest rates, a global banking crisis, FPI outflows, slow economic growth, the taming of inflation, and certain governance issues at large companies with low earnings and high valuation multiples are driving the market’s correction.
“A variety of factors such as rising interest rates, a global banking crisis, FPI outflows, slow economic growth, the taming of inflation, and certain governance issues at large companies with low earnings and high valuation multiples are driving the market’s correction.
“Once we fully address these challenges, we may see private companies entering public markets potentially in the second half of FY24 and existing IPO filings at Sebi wish to await this period of doldrums to address these bearish market sentiments derail. ‘ Pandy said.
“Once we fully address these challenges, we may see private companies entering public markets potentially in the second half of FY24 and existing IPO filings at Sebi wish to await this period of doldrums to address these bearish market sentiments derail. ‘ Pandy said.
Considering the turbulence in the market, only good companies with attractive prices will get a good response from investors, said Geojit’s Vijayakumar.
Considering the turbulence in the market, only good companies with attractive prices will get a good response from investors, said Geojit’s Vijayakumar.
This story was published from a wire agency feed with no changes to the text.
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