Looking to tap into the upbeat investor sentiment, as many as 32 companies, including Lavasa and UFO Moviez, have filed draft Initial Public Offer (IPO) papers with capital markets regulator SEBI in the first year of the Modi government.
Companies are expected to continue to file IPO papers in the coming months as the overall sentiment in the market is positive for equity issuances, experts said.
Since the NDA government led by Narendra Modi, 32 companies have filed the draft red herring prospectus with SEBI for launching IPOs.
In the previous 12 months, only 13 companies had approached SEBI with IPO proposals.
“After the change of the government at the Centre in May last year, there has been a significant change in sentiment and outlook towards India, which has prompted companies to file IPO papers,” Quantum MF Head Equity Funds Atul Kumar said.
Most of the companies plan to utilise IPO proceeds for capacity expansion as well as working capital requirements.
ICICI Securities Executive Director Ajay Saraf said,“Though overall sentiment in market is positive for equity issuances, we believe companies with strong fundamentals and right valuation will only be able to tap the capital markets.”
Of the current 32 proposals, SEBI has given approval to 20 firms, while 11 firms already have hit the capital markets during the period. However, four companies — Videocon D2H, Emcure pharmaceuticals, CL Educate and MM Auto — have pulled out their draft documents.
The regulator has already given nod to the IPOs of Lavasa Corporation, RINL, Navkar Corporation, Sadbhav Infrastructure Project, SMC Global Securities, ACB (India), Shree Pushkar chemicals and fertilisers. However, these companies are yet to launch their public offers.
A majority of the companies which have approached SEBI are mid-sized, looking to mop up between Rs. 200 crore to 1,500 crore.
