The coming months will see public issues worth a total of $1.24 billion or Rs.8,300 crore hit the capital market as some of the recent listings have enhanced the confidence level of companies looking to tap the equity market.
The last fortnight saw the listing of InterGlobe Aviation and S.H. Kelkar & Company wherein both the entities managed to make their debut at an impressive premium over their respective issue price.
According to data from Prime Database, a primary market monitoring firm, 15 companies have got the approval from the capital markets regulator Securities and Exchange Board of India (SEBI) to launch their initial public offerings (IPOs). The regulatory go-ahead is valid for a year from the date of approval.
The list includes entities like AGS Transact Technologies (Rs.1,350 crore), Alkem Laboratories (Rs.1,500 crore), Amar Ujala Publications (Rs.60 crore), Catholic Syrian Bank (Rs.400 crore), Rashtriya Ispat Nigam (Rs.1,500 crore) and Uniparts India (Rs.155 crore) among others.
“It is quite likely that the coming months would see around 8-10 companies launching their IPOs. Good listings do help in enhancing investor sentiment but it impacts more of the retail investors or high net worth individuals rather than institutional ones. A good quality IPO sees a lot of post-listing demand from large investors who were not able to participate in the IPO,” said Subhrajit Roy, Associate Director and Head — Equity Origination, Kotak Investment Banking.
While the institutional portion of InterGlobe Aviation IPO was subscribed 17.80 times, S H Kelkar & Company witnessed the institutional segment getting subscribed 25 times.
Interestingly, the traction in the primary market comes at a time when the secondary markets are still struggling to register a strong upward trend on account of weak global cues.
Till date, the benchmark 30-share Sensex of BSE has lost nearly six per cent in the current calendar year.
According to the National Stock Exchange (NSE), 18 companies got listed on the bourses this year.
In 2014, the Sensex gained nearly 30 per cent but only eight companies made their debut on the exchanges.
“This is a good time for companies to consider launching their IPOs as institutional investors have also become comfortable. While there is still some amount of indecisiveness in the secondary market, there is good amount of traction in the primary segment. Investors have realised that one can make money from IPOs as well,” says Uday Patil, director, investment banking, Keynote Corporate Services.
