The Samvat 2077 was strong for the primary market, but Samvat 2078 is likely to be stronger as experts feel more than Rs 1 lakh crore worth of public issues will hit the market in the next one year, including that of the Life Insurance Corporation of India (LIC).
A positive secondary market environment with an expected continuity in bull run for the coming years, likely increase in the flow of foreign money especially after a slew of measures taken by the government and the RBI to boost economic recovery and support several key sectors like infrastructure, manufacturing and digitalisation, and increased participation of domestic retail investors induced companies to go for fund raising through public issues along with focus on increasing their brand visibility by listing on the bourses, according to experts.
A total of 47 companies raised Rs 86,650 crore through initial public offerings this year, setting a record. Food delivery giant Zomato, Power Grid Infrastructure Investment Trust, Gland Pharma, Sona Comstar and Nuvoco Vistas Corporation were the biggest IPOs among them in last Samvat.
“Definitely, the momentum in primary markets should continue as we see more and more unicorns and fintechs getting listed. Also, the biggest awaited IPO of LIC is coming in the calendar year 2022,” said Narendra Solanki, Head of Equity Research (Fundamental) at Anand Rathi Shares and Stock Brokers.
“It (amount of fund raising) is very difficult as the LIC issue size is not final yet, looking at the current calendar year’s fund raising figure, which is almost about Rs 76,000 crore, it could be Rs 1-1.3 lakh crore next year,” he said.
“Last two years have been spectacular for the primary market and I am expecting that a similar show might get repeated this year too. Many IPOs are lined up which have massive potentials to give impressive listing gains which include big names like LIC, NSE, Paytm and many more,” Gaurav Garg, Head of Research at CapitalVia Global Research, said.
Nykaa operator FSN E-Commerce Ventures, Fino Payments Bank, Sigachi Industries, Policybazaar operator PB Fintech and SJS Enterprises have already closed their IPOs (total Rs 13,103 crore) and will get listed in the coming weeks.
One97 Communications-owned Paytm, the leading digital ecosystem for merchants and consumers, will be the biggest ever public issue getting launched next week (November 8-10) to garner Rs 18,300 crore from investors. KFC operator Sapphire Foods India (Rs 2,073 crore) and Latent View Analytics (Rs 600 crore) will also launch their IPOs in the coming week.
Twenty-two companies have so far received the green light from the capital markets regulator to float their public issues. Tarson Products, Anand Rathi Wealth, ESAF Small Finance Bank, Adani Wilmar, Penna Cement Industries, Star Health, Skanray Technologies, Mobikwik, Popular Vehicle and Services, Paradeep Phosphates, Northern Arc Capital, Chemspec Chemicals, Go Airlines, Shri Bajrang Power and Ispat, Fincare Small Finance Bank, Supriya Lifescience, Jana Small Finance Bank, Shriram Properties, Utkarsh Small Finance Bank, Arohan Financial Services, and Seven Islands Shipping are the companies which have received Sebi nod, as per Axis Capital reports dated November 1, 2021.
Their total fund-raising is pegged at more than Rs 25,000 crore which included only fresh issuances and in some cases offer-for-sale too. Hence the total fund raising would be much more than that.
According to the Axis Capital report, 44 companies have filed their IPO draft papers with Sebi and are awaiting its observations. They include Radiant Cash Management, BVG India, Lava International, Puranik Builders, Waaree Energies, Emcure Pharmaceuticals, Medplus Health, Sterlite Power Transmission, CMS Info Systems, Gemini Edibles & Fats India, and Aadhar Housing Finance.
LIC is also expected to come out with its IPO in the last quarter of FY22, as per media reports. The total fund-raising by the government is unknown but reports indicated that it could be more than Rs 70,000 crore.
Also, there are several companies yet to file their draft papers, but intend to come out with IPOs in the coming quarters.
“We could continue to see more IPOs in the coming year as there are many unicorns and market disruptors like Flipkart, Ola, Byjus, PhonePe, OYO, Delivery, etc. that plan to get listed in the coming future,” said Harshad Chetanwala, Co-Founder at Mywealthgrowth.com.
Will the primary market slow down after the LIC issue? Manisha Girotra, India Chief Executive Officer at Moelis & Company, doesn’t think so. “I don’t think there will be any slowdown in primary market activities but I do expect that the investors will be more discerning,” she said.
Experts advised investors to have a proper strategy and analysis of every IPO before investing in the same and one should not just invest only for listing gains, better think of the long term.
“From an investment perspective, one should have a proper strategy in place for IPOs as merely looking at the listing gains may not work well in the long term,” Harshad Chetanwala said.
“These IPOs are coming in the market cycle where there is a lot of positive investor sentiment and this can easily result in oversubscription, this results in the lower allotment and may have a marginal impact on the overall portfolio of investors. Most of these companies are raising money to grow their business in future and hence investing from a long-term mindset in the right companies is more important than just investing in all IPOs,” he said.
Note: IPOs that launched as well as listed in Samvat 2077 are considered for this copy.
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