Bull run on D-St may unleash an IPO flood , Sources also told that the coming two weeks are likely to see a flood of public issues with a target to raise Rs 10,000-12,000 crore.
More than 15 IPOs to hit Dalal Street before Union Budget.
The primary market seems to be keeping Dalal Street abuzz with more than 15 companies queuing up to go public between December and January on the back of a sustained bull run and a flush of liquidity in the market.
In the run-up to the Union Budget, a vote-on-account, 2024 being an election year, some of the major issues to hit the market include the Rs 1,200-crore Doms Industries, Rs 1,500-crore India Shelter Finance Corporation, Rs 1,000-crore Inox India, Rs 1,350-crore Muthot Microfin, Rs 1,000-crore Apeejay Surrendra Park Hotels, Jana Small Finance Bank, and Medi Assist Healthcare Services.
In additon, Suraj Estates (around Rs 400 crore), Motison Jewellers, Mukka Proteins (around Rs 200-300 crore), Happy Forgings, RBZ Jewellers (Rs 100-125 crore), Allied Blenders and Distillers, Innova Captab (Rs 900 crore), Enviro Infra Engineers, and EPack Durables are expected before the Union Budget.
The Doms Industries IPO will be open for bids from December 13 to 15. The stationery and art product company will float fresh issues worth Rs 350 crore, and a Rs 850-crore offer-for-sale from existing shareholders.
India Shelter Finance, Inox India, Muthot Microfin, Apeejay Surrendra Park Hotels, Jana Small Finance Bank, Medi Assist Healthcare Services, Suraj Estates, Motison Jewellers, Mukka Proteins, Happy Forgings, Innova Captab, and RBZ Jewellers are expected in December itself.
Allied Blenders, Enviro Infra Engineers and EPack Durables may come up with their IPOs in January.
Sources also told that the coming two weeks are likely to see a flood of public issues with a target to raise Rs 10,000-12,000 crore.
“Looking at the josh (upbeat mindset) in the secondary market environment after the state election results and ample liquidity in the system, the primary market would remain high for another 1-2 months,” Prashanth Tapse, research analyst and senior vice-president of research at He believes a reversal in global market trends and the comeback of FII inflows along with a stronger participation of retail investors have kept the spirits high in the primary market.
“Promoters are also in a rush to grab the market mood to get the best valuation. Hence, we continue to see a lot of quality public offers to float tapping the market momentum,” he said.
With markets at all-time highs and IPO issuances closely linked with equity market performance, Manish Chowdhury, head of research at StoxBox, also believes that the upcoming months could see a string of mainboard issuances.
Overall, the foreign investors are very optimistic about the India growth story, which gives the domestic market an edge over China. Even the recent success of the BJP in three out of four major state elections firmed up the confidence among investors about continuation of the current regime at the Centre for five more years. As a result, they are further confident about policy and political stability, and also expect more investment in infrastructure from the government.
In fact, experts said India is in a sweet spot with all parameters aligning towards strong economic growth at the same time the lower crude oil prices benefiting India to control inflation.
“This election victory, coupled with mounting expectations of an impending rate-cut cycle in the US, may help sustain the Indian market’s favourable valuations. We expect the market sentiment to continue to strengthen,” Shradha Sheth, head of equities at Neo Wealth and Asset Management, said.
Not only the benchmark indices, the broader markets too hit record highs. Even some sectors such as Nifty Bank is at record high now. The benchmark Nifty50 surged 5.8 percent in seven days in a row, and recorded more than 11 percent jump since the October lows, which is closer to the psychological 21,000 mark now.
Anil Rego, founder and fund manager at Right Horizons, said a political continuity would likely point to capex-driven policies and the investment cycle should continue to unfold over the next several years. He believes the fundamentals are strong and market momentum is likely to continue over the long term.
In the current year so far, 48 companies launched their IPOs in the mainboard segment, raising nearly Rs 44,700 crore, against nearly Rs 60,000 crore worth of fund raising in the previous calendar year by 40 public issues.
Public issues floated this year have already outnumbered the collective count of the last year, but if all these planned IPOs finally make it to the Street, then the fund-raising of 2023 may equal the last year’s figure.
The strong listing gains posted by recent IPOs like Tata Technologies (up 163 percent on debut), Gandhar Oil Refinery (up 78 percent), Indian Renewable Energy Development Agency (up 87.5 percent), and Flair Writing Industries (up 49 percent) also kept up the buoyant mood on Dalal Street.
“With the recent IPOs posting strong gains, investors have become increasingly confident and looks like a lot of retail money is still waiting on the sidelines to be deployed into the markets,” Manish Chowdhury of StoxBox said.
However, he would caution investors to not get carried away by the past performance and look at each IPO subjectively, especially on the valuation front and the usage of the net proceeds.
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