A large part of the total fundraising would be collected from technology-oriented companies.
The successful initial public offering of grocery supplier Zomato, which was overwhelmingly subscribed by over 38 times, encouraged new age tech companies to make their major stock sales.
In the past, companies like Zomato have raised funds from private equity players, and the IPO opened a new source of funding for new-age tech companies, said Jyoti Roy, vice president (equity strategist) of Angel One.
Companies that are expected to raise funds through their IPOs during the October-November period include Policybazaar ( ₹6,017 crore), Emcure Pharmaceuticals ( ₹4,500 crore) Nykaa ( ₹4,000 crore), CMS information systems ( ₹2,000 crore), MobiKwik Systems ( ₹1,900 crore), said the merchant banking sources.
In addition, Northern Arc Capital ( ₹1,800 crore), Ixigo ( ₹1,600 crore), sapphire food ( ₹1,500 crore), Fincare Small Finance Bank ( ₹1,330 crore), Sterlite Power ( ₹1,250 crore) RateGain Travel Technologies ( ₹1,200 crore) and Supriya Lifescience ( ₹1,200 crore) could place their IPOs during the reporting period, they added.
Angel One’s Roy attributed the impressive IPO pipeline in the coming month to several factors, including a stronger-than-expected economic recovery after the second wave, sustained FPIs and domestic flows in the markets, and an increase in retail participation in the exchange last year Year.
Going forward, the IPO boom is expected to continue in the coming year if the prevailing market situation remains constant or doesn’t change much, said Kaushlendra Singh Sengar, Founder and CEO of INVEST19.
A similar statement was made by Nikhil Kamath, co-founder of True Beacon and Zerodha, who said if the bull run continues for the next 1-2 years, the IPO onslaught will continue. In addition, the technology sector is expected to remain an important market driver.
So far, in 2021, up to 40 companies have launched their IPOs to increase them ₹$ 64.217 million. In addition, Aditya Birla will be his Sun Life AMC ₹2,778 crore initial sale of shares on September 29th.
Additionally, PowerGrid has cleaned up InvIT, the Infrastructure Investment Trust (InvIT) sponsored by the Power Grid Corporation of India ₹7,735 crore raised through its IPO and Brookfield India Real Estate Trust ₹3,800 crore on his first stock sale.
That was much higher than ₹26,611 crore raised by 15 companies through initial stock sales throughout 2020.
Such impressive fundraising through IPOs was last seen in 2017 when companies mobilized ₹67,147 crore from 36 initial stock sales.
Kamath said IPOs are highly dependent on market cycles and the exuberance of IPOs seen over the past 18 months is a function of the current bull cycle. Companies try to take advantage of investor sentiment.
“The market is reaching new highs and the strong response we are seeing in the primary market is pushing companies that were on the fence to come and take advantage of the buoyant market,” said Vikas Singhania, CEO of TradeSmart.
He went on to say that going forward, companies will raise money for growth capital or inorganic growth opportunities.
Many of the IPOs are an offer for sale (OFS) where the private equity player or the promoter wants to pay off part of their stake.
“These days, the whole process of going public is getting a lot of attention for those companies that act as indirect advertising,” said Kamath.
Initial share sales received enormous requests from investors and IPOs subscribed several times. This has led companies to raise funds through IPOs.
The initial stock sales of nearly a dozen companies, including Paras Defense and Space Technologies, MTAR Technologies, Easy Trip Planners, Devyani International, Rolex Rings, Tatva Chintan Pharma Chem, and Nazara Technologies, were subscribed over 100 times.
Interestingly, most IPOs in the current calendar year opened at a premium over the issue price, which indicates a strong investor appetite.
Laxmi Organic Industries, MTAR Technologies, Easy Trip Planners, GR Infraprojects, Clean Science and Technology, Macrotech Developers, and Ami Organics, which were listed this year, are trading above their issue price and generating smart returns in the 110-320 percent range. to investors since it was listed.
Sengar of INVEST19 said that given the current favorable interest rate scenario and high liquidity, financial institutions are offering IPO financing products at lower interest rates. The lower financing costs will continue to support the IPO boom.
Additionally, PSU divestment will be a blockbuster to support the ongoing IPO boom. LIC is expected to be listed in 2021-2022, which will be one of the largest IPOs in the history of the Indian market. This will help the current ongoing boom in the IPO market for 2022, he added.
Earlier this month, Sebi chairman Ajay Tyagi said that growth-oriented tech companies have added to the market ₹15,000 crore through first share sales in the last 18 months and IPOs worth approx. ₹30,000 crore from such companies are in the pipeline.
“The growing number of unicorns in the startup ecosystem is a testament to the fact that new age tech companies are growing up in our economy. These companies often have a unique business model that is focused more on rapid growth than immediate profitability, ”he said.
This story was posted through a news agency feed with no changes to the text. Only the heading was changed.
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