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IPO mania likely intensify in March quarter, with 23 companies preparing for public offerings

The IPO mania is far from finishing up, and the primary market will see rapid development in the March 2022 quarter, with almost two dozen firms looking to raise around Rs 44,000 crore through initial share sales, according to reports.

Golden smartphone with IPO stocks purchase app on the screen on wooden table in office

Courtesy: Prykhodov

Despite the fact that market regulator Securities and Exchange Board of India (SEBI) has now decided to tighten rules for initial public offerings (IPOs) in order to regulate extreme volatility in stock market price on their listing day as well as also to limit their proceeds, which are allocated for future acquisitions, as many as 23 companies are planning to launch their IPOs in the March quarter of the current fiscal.

This follows after 63 companies raised an unprecedented Rs 1.2 lakh crore through initial public offerings (IPOs) in 2021, taking into account the impact of the covid19 pandemic on the domestic economy. In addition to these companies, PowerGrid InvIT (Infrastructure Investment Trust) ended up raising Rs 7,735 crore through its IPO, while Brookfield India Real Estate Trust raised Rs 3,800 crore via its REIT (Real Estate Investment Trust). In 2021, a continuous excitement in the IPO market was fueled by excess liquidity, massive listing gains, and rising retail investor participation.

Hotel aggregator OYO (Rs 8,430 crore) and supply chain startup Delhivery (Rs 7,460 crore) are among the companies anticipated to raise funds through IPOs during the March quarter, the report added. Furthermore, Adani Wilmar (Rs 4,500 crore), Emcure Pharmaceuticals (Rs 4,000 crore), Vedant Fashions (Rs 2,500 crore), Paradeep Phosphates (Rs 2,200 crore), Medanta (Rs 2,000 crore), Mobikwik (Rs 1900 crore) and ixigo’s parent Le Travenues Technology (Rs 1,800 crore) are likely to launch their initial share sales. Healthium Medtech, Skanray Technologies, and Sahajanand Medical Technologies are also expected to go public during the time frame under review, according to some merchant bankers. These companies are raising capital to debt payments, fund organic & inorganic growth initiatives, including departures for existing shareholders.

Eklavya, founder of Recur Club – a trading platform, in a statement, said, “Initial public listing by the companies is done to raise capital through the public which increases the liquidity of the share as well as helps in valuation discovery.”

Similarly, Prateek Singh, founder, and CEO of LearnApp.com stated that tech firms are now looking to expand globally, and in order to do so, they would need capital, which is being gathered through the IPO route. Furthermore, anchor investors in these firms have been waiting for a departure to be paid handsomely; this exit is now accessible to anchor investors via the IPO route, he added.

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