The Securities and Exchange Board of India (Sebi) gave its approval to initial public offerings (IPOs) through which 28 companies plan to raise about Rs 45,000 crore in April-July 2022. The period has seen 11 companies raising over Rs 33,000 crore through initial share sales.
The firms that have got the Sebi approval for IPOs include Bharat FIH, a subsidiary of FIH Mobiles and a Foxconn Technology Group; lifestyle retail brand FabIndia; Blackstone-backed Aadhar Housing Finance; TVS Supply Chain Solutions; and Macleods Pharmaceuticals and Kids Clinic India, which operates super-specialty mother and babycare chain Cloudnine.
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These firms are yet to announce the launch date of their IPOs and are waiting for the right time to float their issues as current market conditions are challenging, merchant bankers said.
Prashant Rao, director and head equity capital markets, Anand Rathi Investment Banking, said, “Current environment is challenging and companies with approvals in hand are waiting for the right window of opportunity to launch the initial share-sales. In fact, many of them have concluded the roadshows and are waiting for the right time.”
According to data from Sebi, a total of 28 companies obtained the markets regulator’s approval April-July 2022, to launch IPOs. These firms are expected to mop up a total of Rs 45,000 crore.
In the current financial year so far, 11 companies have issued initial public offerings to garner Rs 33,254 crore. Out of this, a significant Rs 20,557 crore was raised by the public issue of Life Insurance Corporation of India (LIC). All these companies hit the primary market during April-May and not a single public issue was launched after May, suggesting a dry spell in the IPO market.
In the last financial year 2021-22, as many as 52 companies raised a record Rs 1.11 lakh crore through IPOs. The fundraising could be due to a slew of public issues from new age loss-making technology startups, strong retail participation and huge listing gains.
“The lack of appetite for the IPO in current fiscal year could be attributed to sharp correction in the secondary market, disastrous performance of new digital companies, like Paytm and Zomato, and poor post listing performance of LIC negatively impacting the sentiments,” V K Vijayakumar, chief investment strategist at Geojit Financial Services, said.
However, Abhijit Tare, MD and CEO of Motilal Oswal Investment Advisors, said markets have just recovered from the mathematical low and more importantly a sentimental low seen in the last quarter and few companies will try to approach markets.
A few of the IPOs will get through in the next 2-3 months based on the merit of their proposals, Tare said adding that a good amount of fundraising is expected to happen in the remaining part of the fiscal year.
“With good quarter results and some favourable economic data, we feel the second half of this fiscal year might give a few windows for issues to happen and may present an opportunity for good quality companies that have been priced reasonably to launch their IPOs,” Rao said.
