The josh for Indian IPOs is high again. Does it indicate a market bottom?
IPOs. Recently, a flurry of companies, 14 to be precise, filed their draft prospectus letters with capital markets regulator Sebi, indicating their interest to tap the public market.
There are also reports that indicate Korean electronics giant LG's India IPO will hit the market as early as this month, ending a lull of nearly 2 months now. It should be noted that the IPO market has been very dull this year due to the correction in the secondary market.
The fall in equities led to reduced investor confidence and many companies had deferred their listing plans. Only 9 companies have come up with their offerings in 2025 and since February, there has been none in the mainboard segment.
But what are companies seeing now that they didn't a few weeks earlier? Does this also indicate a bottoming out in the secondary market or at least the start of it?
First, many companies rushed to file IPO documents before March 31 as this was the deadline for filing DHRPs with audited results available only for September 2024. If they had pushed filing beyond March 31, they would have been required to submit December 31 results.
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Does the buoyant IPO mood signal a market bottom?
Well, the confidence of companies to go ahead and file for IPOs doesn't definitely indicate a bottom but a sign that the market has stabilised and is consolidating at current levels. It does, however, according to experts, signal that we may not have a prolonged period of negative returns, in simple terms we are not far from the bottom.
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