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Last Updated : Apr 17, 2018 01:14 PM IST | Source: Moneycontrol.com

75 IPOs in the offing in FY19, Equirus Cap advises look before you leap

FY18 witnessed unprecedented IPO activity and we anticipate the same to be surpassed in FY19.

Sunil Shankar Matkar

Munish Agarwal, Director-Capital Markets, Equirus Capital, sees over 75 initial public offerings being planned and launched in FY19. However, he was quick to add that the momentum will be subject to uncertainty given the political climate in India and hardening of interest rates.

Here are the edited excerpts from his interview to Moneycontrol's Sunil Shankar Matkar:

As a retail investor, what are the five important things one should consider before investing in an IPO?

Any investor in the primary market needs to factor in the issuing company's business and growth prospects, sustainability of its business model and margin profile, pedigree of the promoters and management team and valuations. While retail investors can also draw comfort from the quality of institutional demand before deciding on investing in an IPO, they should consider the potential difference in investment horizon of such funds.

How did IPOs fare in 2018 and do you see the momentum continuing in FY19 as well?

FY18 witnessed unprecedented IPO activity and we anticipate the same to be surpassed in FY19.

Munish Agarwal
Munish Agarwal
Director-Capital Markets|Equirus Capital
    How many companies are planning to raise funds through IPOs in FY19? Any big names to watch out for?

    FY19 will witness over 75 IPOs being planned and launched. The momentum will be subject to uncertainty given the political climate in India and hardening of interest rates.

    The government has set a divestment target of Rs 80,000 crore for FY19 and expects it to cross Rs 1 lakh crore also. Which companies according to you could see value unlocking this year?

    A few issues expected to reach IPO stage includes Indian Railway Catering and Tourism Corporation (IRCTC), IRCON International, Rail Vikas Nigam, Mazagon Dock Shipbuilders and Garden Reach Shipbuilders.

    Normally anchor investors subscribe to the issue at the higher end of the price band. Is it a good indication for retail investors looking to subscribe to the public issue?

    Generally, anchor investors spend a lot of time in meeting the management, understanding the company and undertaking channel checks, thus their support acts as a good indicator for the overall issue.

    But as highlighted earlier, retail investors need to appreciate that such anchor investors may have an investment horizon and return expectation which is different from the retail investor. To that extent, while retail investors should look at anchor investor interest as an input to decide whether to subscribe to the IPO or not, they should not blindly follow such investors
    First Published on Apr 17, 2018 01:14 pm
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