“IPOs are witnessing huge demand with impressive listing gains. A large number of investors have been opening Demat accounts and 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,” adds Manoj Dalmia
Are you among those investors who placed bids for various IPOs floated in the past few months in order to gain handsome returns? Or one of those retail investors are who planning to apply for upcoming IPOs? Here is some useful information for you pertaining to IPOs launch of late and the ones gearing up for market debut as well.
Manoj Dalmia, Founder & Director, Proficient Equities, says, “IPO market is poised to make a record.” “In the last 7 months, we have seen about 28 companies completing their IPO and raising about Rs 42000 Crores, with 70 more IPOs in the pipeline this year might have the highest number of IPOs till date over the last 15 years as per data given below. This includes brands like Zomato, Tatva Chintan Pharma, Glenmark Life Sciences, etc.”
Huge demand
“IPOs are witnessing huge demand with impressive listing gains. A large number of investors have been opening Demat accounts and 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,” adds Manoj Dalmia.
IPO Boom
Manoj Dalmia further adds, “Equity Gains over the last year outperforming key benchmarks has created equity rush. IPOs like Tatva Chintan Pharma, GR Infra , Chemcon Specialty Chemicals, Happiest Minds Technologies, Route Mobile, GR Infraprojects – and Clean Science &Technology that almost hit a 100 percent 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:-
New Age Companies
Manoj Dalmia opines, “When we look at any new-age companies like Zomato which made an impressive listing on Indian bourse on July 23 with nearly 53 per cent gains, MTAR technology gaining 85% from the issue price of Rs 575,Burger King with a massive 130.7% gain from issue price of ₹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.”
FII Flocking to India
Inflows of foreign direct investment (FDI) into India are shown in the chart below:-
“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% in the F.Y. 2020-21 (US$ 59.64 billion) compared to the previous year F.Y. 2019-20 (US$ 49.98 billion),” says Manoj Dalmia.
Behavioural factor
Manoj Dalmia is of the view that, “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 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 market which has indirectly led to such impulsive moves in the market,” Manoj Dalmia further added.
“With the economy bouncing back and covid fears receding close to Rs 75000 cr 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,” concludes Manoj Dalmia.
