Teji Mandi Explains: What’s in store for IPOs in the future?

Teji MandiUpdated: Friday, August 13, 2021, 09:48 PM IST
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Nearly 30 IPOs have been launched since the year began. The euphoria has swallowed the investor community as major tech companies entered the market. Domestic investors and high net worth individuals (HNIs) are pouring money into the pre-IPO funds to receive early access. Experts believe that banks and financial institutions have doubled their investments in IPOs, reaching a four-year high. Bank treasurers are projected to increase their investment in shares due to a strong IPO pipeline.

July was a blockbuster month for IPOs, with Zomato tapping the capital market. The company’s IPO saw 3.2 million retail applications. This highlights the ever-increasing interest of investors in the stock market. Market observers believe that high retail participation and opening up of Demat accounts is a sign that investors are looking to make big money while sitting at home during the pandemic.

What’s Happening in the IPO Market?

The IPO market is still hot with a strong pipeline including Paytm, LIC, Bajaj Energy, Nykaa etc. Recent companies in the unofficial market were hammered after the sentiment turned poor for the second-rung stocks. Subscription levels turned weaker, and Rolex Rings and Glenmark Life Sciences received lacklustre interest from investors.

Also, the recent BSE circular on surveillance measures on midcaps and smallcaps affected the overall market. Poor bidding and sour market sentiment affected the listings this week. However, things are still up as dealers are looking at big companies to stand up in the IPO.

Update on the Upcoming IPOs

If we look at the IPO calendar in 2021, there are still over 30 companies, including giant Indian tech startups, yet to be launched. In August, there are mostly 3 companies lined up for IPO - Arohan Financial, Fincare Small Finance Bank and ESAF Small Finance Bank.

In September, Mobikwik is expected to launch its IPO. Other companies that have not issued launch dates but are expected to get listed in 2021 includes - Paytm, PolicyBazaar, Bajaj Energy, Nykaa, PharmEasy, Go Airlines, Star Health, Aditya Birla Sun Life AMC, Shriram Properties, and many more.

Will This Hot Run in the IPO Market Continue?

India Inc has raised over Rs 42,000 crore via IPOs in the first 7 months and is expected to cross Rs 1 lakh crore by December. According to the Prime Database data, 34 companies have already filed their offer documents i.e. DRHP (draft red herring prospectus) with SEBI. However, this list does not include LIC, which could raise an IPO to the tune of Rs 50,000 crore. According to a recent report, LIC could be split into two offerings given its mammoth size. Given all these big names and the endless appetite of investors, the IPO pipeline is strong till next year.

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