With the secondary market hitting a new high on a daily basis, the primary market is showing early signs of revival with 10 companies raising ₹11,683 crore till July 10 despite a slow start this year.
The fund raise through initial public offering in the same period last year was lower at ₹10,498 crore if one excludes ₹21,000 crore raised by LIC last May, according to data sourced from BSE.
The IPO pipeline in the second half appears even brighter with 44 issues waiting in the wings to raise ₹48,879 crore and another 26 companies joining the queue for market regulator SEBI approval.
Venkatraghavan S, Managing Director - Investment Banking, Equirus said the secondary markets are doing well and as empirically demonstrated the primary markets revive with a lag.
“There will be some action in the next six months before investors turn cautious ahead of the general elections. The current market is more measured, and there will be interest in differentiated stories and tempered valuations. We are expecting ₹50,000 crore worth of IPOs in the next six months,” he added.
Unlike last year, most of the IPOs so far this year have debuted on the exchange with a sharp listing gain and are holding on to the gain aided unprecedented bull run in the market.
Drone maker Idea Forge Technologies, which issued shares at ₹672 a share made a listing gain of 94 per cent and listed at ₹1,305. It was traded at ₹1,181 on Tuesday.
Nikhil Shah, Director, Beeline Capital Advisors said the IPO market will keep buzzing given the lead indicators of monthly mutual fund SIP of ₹14,000 crore, GST collection of over ₹1.50 lakh crore a month and ever rising investors participation in IPOs.
If the trends in developed countries are any indication, he added the economic growth in India from $3 trillion to $10 trillion is going to be very fast and broad based with active participation of small and medium enterprises.
Interestingly, the total number of active demat accounts surpassed 120 million for the first time in June with the addition of 2.36 million new accounts, the highest monthly increase since last May. The total demat tally crossed 120.51 million, up two per cent from a month ago and 24 per cent compared to last year.
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Several IPOs including IKIO Lighting, IdeaForge Technology and Cyient DLM have garnered significant attention from investors and received frenzied bidding.
The trading turnover in the equity cash segment last month also reached its highest in 14 months with the average daily turnover for both the NSE and BSE hitting 15-month high at ₹67,491 crore.