Calendar year 2021 is set to witness a plethora of initial public offers as fundraising via public issue route gathers steam. In 2020, a majority of IPOs were floated in the second half of the year, once the sentiment in the secondary market improved following the flash crash in March.
Ample liquidity, better than expected economic recovery uplifted the market sentiment and the same was visible in the primary market which managed to raise over Rs 31,000 crore in the year gone by.
In 2020, 16 IPOs hit Dalal Street, of which, 15 were launched in the second half. SBI Card was the only maiden public issue in the first half as COVID-19 and weak market conditions had hit overall sentiment.
The year 2021 seems to be far better than the previous year as the collated list available with the Moneycontrol from sources of merchant bankers indicated that at least 15 companies may come out with their initial public offerings. These include Indian Railway Finance Corporation, Kalyan Jewellers, Suryoday Small Finance Bank, ESAF Small Finance Bank, Indigo Paints, Brookfield India Real Estate Trust, Barbeque Nation Hospitality, Home First Finance Company and Railtel Corporation Of India etc.
Among these, companies such as Indigo Paints, Home First Finance Company, IRFC, Brookfield REIT and Railtel Corporation of India are expected to launch their IPO in January.
"I believe the Indian stock market will continue its movement in 2021 and the primary market will also mirror the same story. Looking ahead, continued improvements in the global risk appetite, strong improvement in advance corporate tax data for Q3 and consistent improvement in domestic economic data indicating strong earnings recovery reflect a rise in GDP growth in the coming quarters. This will further boost Indian equities to perform well," Prashanth Tapse, AVP Research at Mehta Equities told Moneycontrol.
According to Tapse, the IPO market will remain strong as the overall sentiment of D-Street has been positive for the last 4-6 months.
"We see a few dozen companies wishing to grab market sentiment such as ESAF Small Finance Bank, Suryoday Small Finance Bank, IRFCL, Kalyan Jewellers, Craftsman Automation, Laxmi Organic Industries, Indigo Paints, Brookfield REIT, Barbeque Nation and Apeejay Surrendra Park Hotels," he said.
Keshav Lahoti, Associate Equity Analyst at Angel Broking also believes till the time the stock market is rallying, more and more companies will launch IPO as they are bound to get a better valuation on the street.
"As many IPOs are in the pipeline, we do expect more IPOs in 2021 as compared to 2020. Few key IPOs expected in 2021 are LIC, Kalyan Jewellers, RailTel, Indian Railway Finance Corporation, ESAF Small Finance Bank etc," he said.
Last year, the IPO market's performance in terms of return was very strong as Burger King India, Happiest Minds Technologies, Mrs Bectors Food Specialities, Rossari Biotech and Route Mobile provided 100-200 percent return from their issue price, while others including Chemcon Speciality Chemicals, Computer Age Management Services, Gland Pharma and Mazagon Dock Shipbuilders gave double-digit returns to investors.
The equity market itself registered 15 percent gains and the broader markets witnessed an over 21 percent rally in the previous year.
In 2020, 24 companies filed the draft red herring prospectus with the capital market regulator for mainboard IPOs. Of which six companies already launched IPOs in 2020. These include Computer Age Management Services, Likhitha Infrastructure, Happiest Minds Technologies, Gland Pharma, Antony Waste Handling Cell and Mrs Bectors Food Specialities.
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