IPO mania: Fresh issue in total offer size at eight-year high of 48%
Nearly 300 companies have debuted on the bourses in the 10 years to FY23, according to experts.
An interesting trend that was observed in the IPOs that came this year is that the fresh issue as a percentage of total issue size is at 48% which is highest in the last 8 years, according to Edelweiss Mutual Fund.
According to the fund house's chief Radhika Gupta, revival in domestic demand, high-capacity utilization, and improving consumer sentiments mean that more companies will be confident to go public.
«Many firms are raising money for capex which is a positive sign. This capex will result in incremental sales for the next 3-5 years,» Gupta said.
In the past week, five companies, including Tata Technologies, came out with their IPOs that garnered a record Rs 2.6 lakh crore in application amount.
«The huge appetite for equities stems from the confidence that investors have in the India growth story and the large universe of fast-growing, well-managed companies, which are expected to deliver good profits,» said Mahavir Lunawat, Managing Director, Pantomath Capital Advisors
Even after a deluge of IPOs this year, the pipeline ahead is equally strong with 77 DRHPs filed, 29 of which are approved while the rest await approval.
As many as 14 companies are expected to be listed in the coming months.
Radhika Gupta, however, said that the retail experience of choosing and investing in IPOs is patchy. «Poor selection, minuscule allocation and not holding long enough after listing lead to subpar outcomes,» she added.
(You can now subscribe to our ETMarkets WhatsApp channel)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
