IPO frenzy: 15 companies file for IPO documents in just one day

The activity in the IPO market remained buoyant on the back of stronger retail participation as reflected by number of applications and oversubscription. “Success of the IPOs was partly supported by overall positive market sentiments and was further boosted by strong post-listing performance in some of the IPOs,” a Sebi study on IPOs said.

However, most of the investors are looking for listing gains. About 54 per cent of IPO shares (in value terms) allotted to investors (excluding anchor investors) were sold within a week from listing, it said. Individual investors sold 50.2 per cent shares (in value terms) allotted to them within a week from listing, the regulator said. Non-institutional investors (NIIs) sold 63.3 per cent shares by value while retail investors sold 42.7 per cent shares by value, the study said.

Some of the big IPOs in the lot are Hyundai Motor India (Rs 25,000 crore), Swiggy (Rs 11,000 crore), Afcons Infrastructure (Rs 7,000 crore), the flagship construction company of the Shapoorji Pallonji Group, Tata Play (Rs 2,500 crore) — formerly Tata Sky — and SK Finance (Rs 2,200 crore) have got Sebi approval for raising funds via the primary market.

NTPC Green Energy (Rs 10,000 crore), Hexaware Technologies (Rs 9,950 crore) and Vishal Mega Mart (Rs 8,000 crore) are among those waiting for approval from the SEBI.

“We will witness the trend of multinationals coming to tap Indian capital market. Besides, several other market liquidity parameters, notably monthly mutual fund flow has doubled since last quarter and we are getting close to Rs 40,000 crore of money every month. This has fuelled capital market buoyancy phenomenally,” Lunawat said.

While evaluating any IPO, an investor needs to consider 2 aspects: the quality of the company and the valuation at which the IPO is being launched. A good company at a bad valuation also makes for a bad investment. In terms of the quality of the company, investors should look at the promoters, corporate governance practices, revenue and profitability over the last few years, future growth strategy and sectoral performance, among others, said an analyst.

On the valuation front, investors should look at the price-to-earnings multiple of listed peers to get a sense of the valuation. They can also look at the institutional participation to get an idea of the pricing, he said.

The biggest reason for the IPO boom is India’s strong macro environment, which has raised investor confidence. The healthy performance of several new stocks in the last couple of years has also lured investors into investing in new IPOs. A key factor has been the government’s huge investments in infra projects, which seems to have raised the interest of private players in betting on the nation’s growth story.

Of the 144 IPOs listed during April 2021- December 2023, 75 per cent IPOs (108 in number) delivered positive returns. As many as 26 IPOs delivered more than 50 per cent listing day returns, Sebi said. Although, there were some laggards post-listing, it did not deterred enthusiasm in new IPOs. As many as 92 IPOs were oversubscribed more than 10 times and only 2 IPOs were undersubscribed, Sebi said.