IPO market poised to make record: 28 companies raise Rs 42,000 crore, 70 more coming soon
About 28 companies completed their IPO in the last 7 months, raising about Rs 42,000 crore. 70 more IPOs are in the pipeline. The year 2021 might see the highest number of IPOs over the last 15 years. IPOs that have made a stellar debut this year include brands like Zomato, Tattva Chintan Pharma, Glenmark Lifescience, etc.
IPOs are witnessing huge demand with impressive listing gains, a large number of investors have been opening Demat accounts recently investing in secondary markets, and filing applications for IPO, data from the Securities and Exchange Board of India (SEBI) suggests the number of new Demat accounts being opened between April 2020 and January 2021 was around 10.7 million.
Equity gains over the last year outperforming key benchmarks. IPOs like Tattva Chintan Pharma, GR Infra, Chemcon Speciality Chemicals, Happiest Minds Technologies, Route Mobile, GR Infraprojects and Clean Science & Technology almost hit a 100 per cent gain. They didn't stop there but still impressed investors by giving 2x, 3x returns on investment. Here is a look at Top 5 listings and their returns till the current date.
"With the economy bouncing back and Covid fears receding close to Rs 75,000 crore IPO are still in pipeline in 2021-22. Paytm, MobiKwik and several others firms are still in various stages of IPO. Therefore it can be said both the private and retail investors are making hay while the sun shines. For now, we do know that it's a trendy time for both markets and investors," Manoj Dalmia, Director and Founder, Proficient Equities, said.
New Age Companies
When we look at any new-age companies like Zomato which made an impressive listing on the Indian bourses on July 23 with nearly 53 per cent gains, MTAR technology gaining 8 per cent from the issue price of Rs 575, Burger King with a massive 130.7 per cent gain from the issue price of Rs 138.4 etc based on modern business fundamentals, investors have made bets on their future growth and profitability even though peer comparison is not possible, which is evident from their listing gains.
FDI, FII flocking to India
The amount of money that FDI and FII put into the markets indicates that this factor is pushing up the number of retail investors into equity. This is significant as FDI equity inflow grew by 19 per cent in the FY 2020-21 (US$ 59.64 billion) compared to the previous year F.Y. 2019-20 (US$ 49.98 billion).
Changing investment behaviour drives the main market. The low-interest rates provided by fixed income assets encouraged to move towards stocks from debt. This is mostly due to young retail investors who desire to participate in the rapid growth of businesses while also earning a fast return.
Increase in per capita Income
Over the recent years, there is an increase in per capita income which has led to more disposable income at hand. This has created a shift in the mindset of people causing them to park the excess funds in the market which has indirectly led to such impulsive moves in the market.
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