Next month, at least ten companies, including Vishal Mega Mart and the International Gemmological Institute, aim to raise Rs 20,000 crore through IPOs, driven by positive market sentiments and an increase in public offering activity. Upcoming public offerings are expected from Avanse Financial Services, Sai Life Sciences, and Paras Healthcare, among others, amidst a backdrop of strong investor interest and significant historical gains in the IPO market.
The primary market in India is poised for continued vibrancy with an expected influx of new offerings next month, as at least ten companies, including notable players such as Vishal Mega Mart and the International Gemmological Institute (India) Ltd, aim to collectively raise Rs 20,000 crore. Other firms, including Avanse Financial Services, Sai Life Sciences, Paras Healthcare, and DAM Capital Advisors are among those planning public offerings in December. These IPOs will represent diverse sectors, encompassing both fresh equity issues and offers for sale.
Trivesh D, COO of Tradejini, indicated that favorable market sentiments following the recent election results in Maharashtra and Uttar Pradesh could enhance IPO activity. Nonetheless, despite a strong overall performance for IPOs in 2024, some recent offerings have encountered difficulties in the secondary market, often due to pricing challenges amidst a burgeoning market. Trivesh asserted, “For now, with election-related funds returning to the market and the grey market becoming active again, the IPO space has regained some momentum.”
The initiatives by these companies serve dual purposes: facilitating exits for existing shareholders and generating funds necessary for expansion or debt management, among other operational needs. Vishal Mega Mart plans an Rs 8,000 crore IPO entirely through an offer-for-sale. Conversely, the Gemmological Institute seeks Rs 4,000 crore through a mix of new equity issuance and an offer-for-sale. Avanse Financial Services’ Rs 3,500 crore IPO is composed of both fresh equity and an offer-for-sale component.
In a broader context, 75 firms, including major names like Swiggy and Ola Electric Mobility, have successfully raised approximately Rs 1.3 lakh crore collectively through primary offerings, significantly surpassing the Rs 49,436 crore raised in 2023. The interest in the primary market remains robust, with projections of over 30 IPOs anticipated in December. Such a substantial pipeline may challenge market liquidity, especially regarding foreign investment trends.
Historically, investors in the IPO domain have witnessed considerable returns, with an average listing gain of 27 percent observed in the past five fiscal years. As of October 31, 2024, overall investor gains have escalated to 105 percent, illustrating the lucrative potential of IPO investments. It is crucial for investors to stay informed on market dynamics as they engage in upcoming offerings.
The Indian primary market is experiencing a significant uptick in activity, driven by a variety of companies seeking to leverage public offerings to raise capital for expansion and other operational requirements. Recent positive market sentiments stemming from election outcomes are expected to bolster investment interest, further invigorating the IPO landscape. Trend analysis shows a marked increase in both investor participation and the total funds raised via IPOs in 2024 compared to the previous year. Various companies, including retail giants and service providers, are now preparing for substantial public offerings in the coming month.
In conclusion, the Indian primary market is positioned for an exhilarating month ahead with at least ten companies planning to initiate IPOs cumulatively aimed at raising Rs 20,000 crore. The favorable political climate and robust investor sentiments contribute to the revitalized IPO landscape, although potential challenges regarding Liquidity and overseas investment must be monitored closely. The significant historical returns for investors underscore the importance of these upcoming public offerings.
Original Source: www.theweek.in
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