As per industry reports nearly 30-34 Companies have received approvals for initial public offerings (IPOs) totalling around Rs 33,500 crore, are yet to tap stock markets.
Since the reopening of the economy which began in June, the market sentiment seems to have improved as evident from the sharp rise in benchmark indices in recent months. This, along with cheap valuations and ample liquidity cajoled many listed companies into fundraising via QIPs and rights issues, but not many companies have gone public during the same time. So far in calendar 2020, only three companies have come out with an initial public offer.
In March, SBI Cards & Payment Services came out with a public issue worth 10,000 crore followed by Rossari Biotech's Rs 500 crore issue and Mindspace Business Parks REIT which raised Rs 4,500 core in July.
In comparison, 11 companies came out with a public issue last calendar during the same timeframe. These included Metropolis Healthcare, Neogen Chemicals, Polycab India, Sterling & Wilson, Affle India and IndiaMart InterMesh, launched their IPOs successfully.
But the tide may about to turn soon suggest experts who are looking at the Rs 702-crore public issue of Happiest Minds as the opener to the IPO season.
At least six more companies are expected to launch their IPOs before the year's which may bring between Rs 10,000-28,000 crore money in the primary market, experts said.
Route Mobile (around Rs 600 crore IPO), CAMS backed by NSE (around Rs 1,500-2,000 crore), Chemcon Speciality Chemicals (around Rs 350 crore), UTI AMC (around Rs 3,000 crore), Angel Broking (around Rs 600 crore), IRFC (around Rs 4,000 crore), Equitas Small Finance Bank (around Rs 1,000 crore), National Stock Exchange (around Rs 10,000 crore), Gland Pharma (Rs 5,000-6,000 crore) are some of the public issues we may see before the year's end, said two persons familiar with the primary market segment told Moneycontrol.
"We are expecting a strong momentum in the primary market," Astha Jain, Senior Research Analyst at Hem Securities told Moneycontrol.
"We are expecting companies like Route Mobile, Happiest Minds Technologies, Angel Broking, CAMS, Chemcon Speciality Chemicals, UTI Asset Management, Gland Pharma etc to come out with their primary market offerings soon," she said.
Gaurav Garg, Head of Research at CapitalVia Global Research also said, "IPO's attraction might continue to allure investors in the primary market after successful IPO subscription in recent time. Sentiments have improved after COVID-19 economy disruption; however, markets are stable and have discounted impacts on the economy which in turn set the mood for midcap and smallcap stocks."
Angel Broking with IPO size of around Rs 600 crore and CAMS with an IPO size of around Rs 1,500 crore, might come out in September only, which will be an excellent opportunity for primary market participants, he feels.
"UTI AMC, another IPO we expect in September, may be worth investing for listing gains and for long-term holding as well," he said.
As per industry reports, nearly 30-34 companies have received approvals for initial public offerings (IPOs) totalling around Rs 33,500 crore. Prashanth Tapse, AVP Research, Mehta Equities also feels a revival in primary market is on cards as investors' confidence is building up.
"The first half of 2020 we have witnessed a COVID backed underperformance in not only the broader market but also in the primary market, but H2 FY20 looks better than first half. If the broader markets continue to remain buoyant or even stay stable, we will see a steady flow of IPOs in coming months," he reasoned.
"New and emerging investment themes, especially in the space of Retail, IT, Pharma, Speciality Chemical, fintech and consumer tech segments, and proven profitable business model backed by strong financials & brand would gain adequate demand at the right price and valuations and it is important to see the issuer’s leaves enough on the table for fresh investors," he added.
Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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