Mumbai With initial public offerings in India for a record year, companies rushing to go public, resulting in an IPO pipeline costing more 1 trillion going into the next year.
Sixty-three Indian companies set a record 1.19 trillion via mainboard IPOs in 2021, according to data from the primary market tracker Prime Database. it’s 4.5 times 26,613 crores raised through 15 IPOs in 2020 and almost double the previous best 68,827 crore in 2017.
At present, 35 companies have secured the market regulator’s approval for their IPOs next year, which is broadly proposed to be increased 50,000 crores as per Prime Database. Another 33 companies, which are awaiting regulatory nod, are planning to raise funds around Rs. 60,000 crores. This does not include the much-awaited IPO of Life Insurance Corporation of India, which is expected to launch this financial year.
At least half a dozen more companies are planning to file drafts of their prospectuses by the end of December, people aware of the developments said.
These include childcare hospital chain Rainbow Children’s Hospitals, analytics firm Course 5 Intelligence, airport lounge operator Dreamfox, TBO Travel, CJ DARCL Logistics and Campus Shoes, the people cited above said.
In December, around eight companies, including Foxconn’s Indian arm Bharat FIH Ltd and Snapdeal Ltd, filed their draft prospectuses with SEBI.
Other prominent names in the IPO pipeline include Adani Wilmar Ltd., Go Airlines, Pharmacy and Delhivery.
While the primary market pipeline is strong, global macro headwinds could put pressure on IPO launches in the short term.
According to Prithvi Haldia, president of Prime Database, interest rates can be expected to rise as a result of inflationary concerns, which reduce the amount of liquidity available, which will impact the performance of the Omicron variant as well as the secondary market. and consequently the main market.
The frenzied fundraising activity in the primary market, especially from new-age technology companies, has also drawn scrutiny from market regulators and the rules surrounding initial share sales are likely to change somewhat.
Mint reported on Friday that in its last board meeting of the year, the Securities and Exchange Board of India (Sebi) will expand the price band for public offers, extend the anchor investor lock-in period, and cap the amount that a The majority investor can sell. in a share sale.
On Wednesday, Sebi chief Ajay Tyagi said it may be a “good idea” to ask companies, especially new-age technology firms, to explain the pricing of their public offers in the draft paper for public listing.
“Pricing is an important issue, and perhaps more explanation of pricing basis in documents may be a good idea, especially for new tech companies, which are typically loss-making companies, and have their own ecosystem, Your capital is structure,” Tyagi said.
Tyagi, however, said Sebi would refrain from commenting or directing companies on valuation.
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