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Here is why so many companies are going public now?

The Indian market has already seen 24 new listings till June 2021 with the total amount raised is above Rs 39,000 crore and the average fund raised per listing is Rs 1,531 crore.

July 19, 2021 / 02:06 PM IST
IPO (PC-Shutterstock)

IPO (PC-Shutterstock)

The Indian economy is growing and India has a big demand potential due to the size of the population. Satisfying such big business opportunities with bigger structures required a big amount of investment. The business which has the potential to create and satisfy the demanding economy is coming in public and trying to get funding for the next levels of growth. The promoters who have a bigger vision for the next ten to fifteen years are utilizing the current market to grow their business and encash these huge opportunities. The best examples of these are D-Mart, CDSL, and Happiest Minds. The list is very big.

The steps taken by the central banks to face the challenges of Covid-19 have pushed ample amount of liquidity in the global market. So, it is the best time for IPO globally. At the same time, markets are showing higher potential returns for the next few years as recovery is faster-than-expected. Participation of retailers is the highest ever in history.

The Indian market has already seen 24 new listings till June 2021 with the total amount raised is above Rs 39,000 crore and the average fund raised per listing is Rs 1,531 crore. When one compared the above figures from the year 2007, the numbers are still below the average 31 listings per year but the average funds raised is Rs 22,114 per annum is already crossed whereas, till the time average funds raised per listing remained third-highest lead by Rs 1,981 crore in the year 2017 and Rs 1,664 crore in the year 2020.

When we compare data from the year 2017, few things have noticed that since the year 2017 the average fundraised per listing remained above well above Rs 1,000 crore exception of the year 2019.

The basic reason for this is the introduction of Application Supported by Blocked Amount (ASBA), online application facilities, e-KYC which reduced paperwork a lot and increasing the market share of discount brokers. All these things have contributed a lot to open the IPO market for techno-savvy retailers.

Close

In July month, there are as many as eleven IPOs likely to come. Out of which four have already closed, these include companies like Zomato, GR Infraprojects, Clean Science & Technology and Tatva Chintan Pharma, and seven will get open in the remaining days which include Puranik Buliders, Aadhar Housing, Glenmark Life Sciences and Park Hotels.

In the rest of the year, we may see some big names like Paytm, Life Insurance Corporation, National Stock Exchange, Flipkart, Go Air, Policy Bazar and HDB Financial Services. But this is not the end of the story till the time there is potential in economy big houses, as well as new theme businesses will come in search of additional funding to get on growth path soon. Though, the highest fund raising of Rs 75,000 crore plus in the year 2017 is still far away.

So, considering all the above points, Indian IPO market has big potential ahead.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Vishal Wagh
first published: Jul 19, 2021 01:41 pm

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