Five companies, including Kalyan Jewellers India and ace investor Rakesh Jhunjhunwala-backed mobile game company Nazara Technologies, will launch their initial public offerings to raise around Rs 3,740 crore this week, one of the busiest for IPOs in a long time.
Experts attribute the IPO rush to ample liquidity that has been fuelling a bull run in the market. Equity markets have received more than Rs 2.6 lakh crore of FII money since April 2020.
Specialty chemical manufacturer Laxmi Organic Industries and automobile components manufacturer Craftsman Automation will be the first off the block. Their issues will open from March 15 to March 17, 2021.
Ravi Goenka and Yellow Stone Trust-promoted Laxmi Organic Industries is planning to raise Rs 600 crore through the IPO, which comprises a fresh issue of Rs 300 crore and an offer for sale of Rs 300 crore by the promoter.
Craftsman Automation is looking to mop up Rs 823.70 crore through the issues that comprises a fresh issue of Rs 150 crore and the rest is an offer for sale by promoters and investors.
The next day, Jhunjhunwala-backed Nazara Technologies and Suryoday Small Finance Bank's IPOs will open for bidding. Nazara Technologies is looking to raise Rs 582.91 crore, while Suryoday Small Finance Bank is in the market for Rs 582.34 crore. The issues close on March 19. Their anchor book, if any, will open for subscription for a single day on March 16.
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Specialty chemicals company Anupam Rasayan, whose Rs 760-crore IPO opened for bidding on March 12, will be available for subscription till March 16.
The year 2021, like the previous year, has been a busy one for IPOs. So far, more than Rs 13,850 crore has been raised by 10 companies and another Rs 4,500 crore is expected to be mopped up by six more firms during this week.
The IPO rush could be largely due to the availability of low-cost money, which has been boosting equity markets in the last year, experts feel.
Equity markets have received more than Rs 2.6 lakh crore of FII money since April 2020, which has resulted in a 75 percent return on the Nifty and more than doubled returns for midcap and smallcap indices.
"It isn't the first time that low cost source of money are leading to expensive equity valuations. In the past bull markets too, liquidity tailwinds have always been a big catalyst to boost equity returns. All this liquidity is visible in the primary markets too," Nirali Shah, Head of Equity Research at Samco Securities said.
The ongoing enthusiasm in primary markets through IPOs, follow on public offers and offers for sale was in harmony with the current bull market rally, she said. "Retail investors are the most excited lot subscribing to these IPOs for listing gains and nearly 78 percent of total stock listings in FY21 have witnessed first day gains, the highest in atleast three years," she added.
Precision engineering solutions company MTAR Technologies will list its shares on bourses on March 15, while online travel agency Easy Trip Planners, whose IPO was well-received, is expected to commence trading on March 19.