The strong momentum in the secondary market, with the benchmark indices trading at record highs, is proving to be a game-changer for the primary market as the rush of initial public offerings seems to be unending.
Companies including Nykaa, MobiKwik, Fino Payments Bank, Policybazaar, Skanray Technologies, SJS Enterprises and Paytm are expected to open their share sales by November to take advantage of the momentum in the stock markets.
So far, corporate results for the second quarter have largely been in line with estimates or better than expected, driving the benchmark indices to record levels. The earnings come on the back of improving economic growth prospects, decreasing number of Covid-19 cases and the vaccination drive that’s set to touch the 1 billion mark in doses administered.
The Nifty 50 surpassed the 18,500 mark on October 18 and the BSE Sensex came close to 62,000, rising more than 51 percent so far in 2021. The broader markets also surged and the Bank Nifty hit a fresh high.
“The second half of October is likely to be busy for IPOs as a number of them are expected to go live and there is another Rs 20,000 crore of IPOs expected in November,” said Mohit Nigam, head of portfolio management services at Hem Securities.
He said 2021 would then end up being the best year for IPOs, bettering the previous record of 2017. More than Rs 1 lakh crore of IPOs may hit the market by March 2022. Upcoming IPOs in October with their estimated IPO size are Nykaa (Rs 4,000 crore), MobiKwik (Rs 1,900 crore) and Ixigo (Rs 1,600 crore).
Nykaa, MobiKwik, Fino Payments Bank, Skanray Technologies, SJS Enterprises and Adani Wilmar are among the companies that have received approval from the regulator to go ahead with their IPO. Policybazaar and Paytm are expected to get approvals soon.
“For H2FY22 the pipeline for IPOs is even more robust with more than 20 IPOs lined up to raise more than Rs 1,10,000 crore. These obviously include the mega Rs 16,600 crore IPO of Paytm and the Rs 75,000 crore Life Insurance Corporation of India IPO,” said Nigam.
Companies that closed their public issues in the first half of FY22 include Zomato, Devyani International, Paras Defence and Space Technologies and Barbeque Nation. Shares worth about Rs 60,000 crore were sold in 26 IPOs during the first half of this financial year.
According to Ajay Kejriwal, president at Choice Broking, the pipeline of IPOs in the second half is pretty strong.
“Prominent companies that are planning to raise money are Mobikwik, Paytm, Nykaa and Fino Payment Bank. Also the IPO of LIC is scheduled in the last quarter of the current fiscal. Thus, considering the line-up, we are confident that the amount raised in H2 will be far better than H1 and FY22 will be considered as one of the best years for IPO, “ he said.
Abhijit Bhave, CEO at Fisdom Private Wealth, said factors like the current bullish environment, data about a significant number of unlisted companies achieving unicorn status, a large number of new investors attracted to equity during the Covid-19 era and the ability to obtain premium listings would see the IPO market continue to rise uninterrupted.
Here’s a list of IPOs that could be launched by November:
Fino Payments Bank
Fintech firm Fino Payments Bank’s Rs 1,300-crore IPO comprises a fresh issue of Rs 300 crore and an offer for sale of over 15.6 million shares by promoter Fino Paytech. The IPO received approval on October 1.
The Securities and Exchange Board of India approved the Rs 4,000-crore IPO of FSN E-Commerce Ventures (Nykaa) on October 14. The share sale by the online beauty retail startup, which was founded by former investment banker Falguni Nayar, comprises a fresh issue of Rs 525 crore and an offer for sale of 43.1 million shares by shareholders including Sanjay Nayar, TPG, Lighthouse and Sunil Munjal.
Online payment and lending firm One Mobikwik Systems received approval from Sebi to launch its Rs 1,900 crore IPO on October 8. The offer consists of a fresh issue of Rs 1,500 crore and a secondary share sale of Rs 400 crore by existing investors.
The Rs 800 crore IPO from SJS Enterprises, an aesthetics solutions provider, will be a complete secondary share sale by Evergraph Holdings (Rs 688 crore) and founder KA Joseph (Rs 112 crore).
The medical equipment maker received the nod from Sebi for its IPO, which will comprise a fresh issue of Rs 400 crore and an offer for sale of 14.1 million shares by the promoters and existing shareholders.
PolicyBazaar parent firm PB Fintech is yet to receive approval from Sebi to ahead with its IPO. The planned Rs 6,017.5 crore offer will comprise a fresh issue of Rs 3,750 crore and an offer for sale of Rs 2,267.5 crore.
One97 Communications, the parent company of fintech platform Paytm, is yet to get approval from the securities market watchdog. Its proposed Rs 16,600 crore public offering will comprise a fresh issue and an offer for sale of Rs 8,300 crore each. This would be the largest public issue since Coal India raised Rs 15,000 crore in October 2010.
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