Among the companies that have been cleared by the regulator are lifestyle retail brand FabIndia; Bharat FIH, a subsidiary of FIH Mobiles and a Foxconn technology group;
supply chain solutions; Aadhar Housing Finance backed by Blackstone; Macleods Pharmaceuticals and Kids Clinic India, which operates the super specialty mother and baby care chain Cloudnine.
These companies have not yet announced the launch date for their IPOs and are waiting for the right time to launch their issuances because current market conditions are difficult, the investment bankers said. “The current environment is challenging and companies with approvals in hand are waiting for the right window of opportunity to launch the first equity sales. In fact, many of them have concluded roadshows and are waiting for the right time. “, Prashant Rao, Director and Head Equity Capital Markets, Anand Rathi Investment Banking, said.
According to data from the Securities and Exchange Board of India (Sebi), a total of 28 companies have obtained clearance from the regulator to tap the IPO route for fundraising in April-July 2022-23 . Together, these companies are expected to mop up Rs 45,000 crore.
So far in the current financial year, 11 companies have gone public to raise Rs 33,254 crore. Of these, the lion’s share (Rs 20,557 crore) was raised by the public issuance of
All of these companies entered the primary market in April-May and no public offerings were launched after May, suggesting a dry spell in the IPO market.
This came after as many as 52 companies tapped the primary market to raise a record Rs 1.11 lakh crore over the whole of 2021-22. The impressive fundraising could be down to a slew of public issues from loss-making new-era tech startups, strong retailer turnout and huge listing gains.
The lack of appetite for the IPO in the current fiscal year could be attributed to a sharp correction in the secondary market, the disastrous performance of new digital companies, such as
and , and LIC’s poor post-listing performance is negatively impacting sentiment, said VK Vijayakumar, chief investment strategist at .
Anand Rathi Investment Banking’s Rao also said that due to market volatility and some price performance issues, investors were wary of new issues.
However, Abhijit Tare, MD and CEO, Motilal Oswal Investment Advisors is of the opinion that the markets have just recovered from a mathematical low and more importantly a sentimental low seen last quarter and that few companies will try to approach the markets.
A few of the IPOs will pass over the next 2-3 months depending on the merit of their proposals, Tare said, adding that a fair amount of fundraising should take place in the remaining part of the fiscal year.
“With good quarterly results and favorable economic data, we believe the second half of this fiscal year could provide some windows for issues to arise and may present an opportunity for good quality businesses that have been reasonably priced for launch their IPOs,” Rao said. said.
Interestingly, there has been a sudden rush among companies to file preliminary IPO documents with Sebi over the past two months. From June to July, a total of 15 companies, including Sula Vineyards, Allied Blenders and Distillers, Utkarsh Small Finance Bank and Sai Silk Kalamandir, approached Sebi with their draft documents to raise funds through initial share sales.
“There’s a lot of talk in the private realm. Many small town developers who have done a fantastic job of growing their business but never thought about monetizing their efforts are now preparing to move. So we’re seeing a lot of applications being filed with the regulator”,
said Tare of Investment Advisors.