Bear attack spoils IPO market sentiment as only 2 IPOs to hit Dalal Street with 6 listings next week

IPO Market

After the significant correction in the equity market since the start of the October series, the primary market mood also seems to have turned cautious in October as there will be only two companies opening IPOs next week starting from October 7. This is especially after the flood of 12 public issues in the mainboard segment and 40 in the SME segment in September.

The Nifty 50 fell nearly 5 percent from its record high in the October series so far, amid Middle East tensions, rising oil prices, and overvaluation concerns. Additionally, there is a fear of flowing money from India to China after China announced stimulus measures in September. Experts expect the sentiment may remain subdued in the short term, but they remain bullish on India's growth story for a medium to long-term perspective and advised buying such major dips for achieving benefits in the long run.

"The bearish sentiment continued as investors are monitoring the escalating conflict in the Middle East and have adopted a sell-on recovery strategy. The pessimism on the market is expected to continue in the near term amidst rising crude prices and fund flows to cheaper markets like China," Vinod Nair, Head of Research at Geojit Financial Services said.

According to experts, despite short-term volatility, the flood of IPOs will continue in India in the medium to long term considering the expected strong growth in the Indian economy with several initiatives from the government to support this growth, but they advised focussing on quality IPOs, especially in the SME segment.

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"The public issue market is seeing a strong investor sentiment. The trend for IPOs has now become so euphoric that a 100x subscription is normal. We foresee bumper appetite for IPOs will continue," Divam Sharma, founder of Green Portfolio said.

According to Vipul Bhowar, senior director listed investments at Waterfield Advisors, it is important to note that not all SMEs are the same. "This market includes both promising companies with strong growth potential and others that may pose risks to investors due to questionable practices or financial instability. Therefore, a balanced and careful approach is needed when evaluating the SME landscape in relation to IPOs," he said.

The primary market will see one IPO launch each from the mainboard and SME segments, while the total fundraising by both will be Rs 365.5 crore.

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Garuda Construction and Engineering IPO

The Rs 264-crore initial public offering from the mainboard segment will be opening for subscription on October 8, with a price band at Rs 92-95 per share. The Mumbai-based EPC company intends to raise Rs 173.85 crore via fresh issue and Rs 90.25 crore through offer-for-sale at the upper price band. The issue will close on October 10.

PKH Ventures, the promoter of the company, will be offloading 95 lakh shares in the offer-for-sale.

Shiv Texchem IPO

The hydrocarbon-based chemicals supplier will also launch its Rs 101.35-crore maiden public issue on October 8 and close on October 10. The price band for the book-built issue has been fixed at Rs 158-166 per share.

The only IPO from the SME segment next week will entirely comprise of fresh issue of 61.05 lakh equity shares by the company.

IPO Closing Next Week

Khyati Global Ventures, the exporter and re-packager of a variety of FMCG products, will close its Rs 18.3-crore SME public issue on October 8. It is a fixed price issue, with an offer price of Rs 99 per share. It was subscribed 2.7 times on its debut on October 4.

Listings Next Week

All six companies scheduled for listing in the coming week are from the SME segment. HVAX Technologies and Saj Hotels will debut on the NSE Emerge effective October 7, while on October 8, Subam Papers will list on the BSE SME and Paramount Dye Tec on the NSE Emerge.

Further, the trading in NeoPolitan Pizza and Foods shares will commence on the BSE SME effective October 9, and Khyati Global Ventures shares on October 11.

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