Amid a slew of companies rushing to the Dalal Street, new-age technology firms were among the top bets in the primary markets during the year.
By Ruchit Purohit
Indian companies have raised more than Rs 1 lakh crore via initial public offerings (IPOs) in the current calendar year, which is the highest-ever in a decade. So far this year, a total of 47 companies have raised a sum of Rs 1,06,809 crore, data from Capitaline showed.
Amid a slew of companies rushing to the Dalal Street, new-age technology firms were among the top bets in the primary markets during the year. Paytm (One97 Communications), Nykaa (FSN E-commerce Ventures), and Policybazaar (PB Fintech) have added more than Rs 29,000 crore in the current month itself.
Ample liquidity amid low interest rates, buoyant secondary markets, recovery in the economic growth, strong earnings and increased retail participation are among the top factors that drove the primary markets so far in 2021.
“The bottom line is that the secondary markets were good with great returns in the last one year. Secondly, surplus money is in abundance due to which we are not seeing any downturn below specific levels and people still have money,” Suresh Shukla, joint president, Kotak Securities, told FE.
Nearly five companies witnessed more than 100% gains on the day of listing during the period, attracting more individual investors to the primary markets. Recently, shares of Sigachi Industries surged over 270% on its listing day against its issue price. Interestingly, of the total money raised so far in 2021, more than Rs 19,500 crore was marked under retail investors, data compiled by FE showed.
Previously, more than Rs 67,000 crore was raised via IPOs in 2017 and Rs 26,000 crore in 2020, significantly lower than the current year. As 2021 comes to an end, a dozen or more companies are awaiting approvals from Sebi to float their initial share sale.
“Due to absence of other asset classes, with banks offering interest rates on FDs at 4% to 4.5% and inflation being above 5-6 levels, both institutional and retail flows are getting directed to equity markets,” Shukla said.
The pipeline continues to remain strong with companies like Mobikwik, Ixigo, Emcure Pharmaceuticals, and the mother of all – Life Insurance Corporation (LIC) – to hit the bourses in coming months. LIC will hit the markets by Q4, Tuhin Kanta Pandey, DIPAM secretary, said on Wednesday.
“In India, investors continue to have a favorable outlook in the short term, supported by liquidity, strong performance by companies and a continued focus on regulatory reforms. Like global markets, investors are willing to invest in companies with attractive business models, good corporate governance, quality of management team and fair valuations,” EY said in a report earlier.