IPO Action: Quiet week ahead for mainboard segment, but SME section remains in focus with 6 listings lined up

On January 3, there will be a total of four listings including Akanksha Power and Infrastructure, and HRH Next Services on the NSE Emerge. The other two, namely Manoj Ceramic and Shri Balaji Valve Components, will debut on the BSE SME.

Also read: IPO Rush: 54 of 59 issues return 45% in 2023; just 4 trading below issue price

All these four companies closed their public issues on December 29, with the Rs 27.5-crore Akanksha Power and Infrastructure offer subscribing more than 115 times, and Rs 9.6-crore HRH Next Services issue booking over 65 times. The Rs 14.5-crore initial public offering of Manoj Ceramic was subscribed to around 9 times, and the Rs 21.6-crore IPO of Shri Balaji Valve Components saw robust response from investors, subscribing over 270 times.

Kay Cee Energy & Infra, which provides services for the construction and commissioning of electricity transmission and distribution systems, will be the last listing next week on January 5. The Rs 16-crore initial public offering will be closing on January 2, and so far subscribed 146 times, indicating attracting significant interest from investors. The offer was opened on December 28.

Logistics and transportation services provider Kaushalya Logistics will close its Rs 36.6-crore public issue on January 3. The IPO was subscribed over 9 times on December 29, the first day of bidding.

Also read: 2023 IPO Recap: Top Misses And Hits; Will 2024 Be Any Different?

With Kaushalya Logistics, a total of 182 companies launched their maiden public issues during the year 2023, raising Rs 4,967 crore. In fact, this is the highest ever amount raised by SMEs through IPOs in a single year and even the number of IPOs launched were higher compared to previous years.

In the previous year 2022, 109 companies mobilised Rs 1,980 crore through public issues.

Meanwhile, the BSE Small and Medium Enterprises IPO index rallied 96 percent during the year gone by, outperforming the BSE IPO index (mainboard segment) which recorded 41 percent gains.

In the mainboard segment, a total of 58 companies raised Rs 52,637 crore through public issues during the year. The coming year is also expected to be strong for the primary market.

"Overall, a remarkable debut and significant listing gains from a lot of companies have generated substantial buzz in the IPO market. Also, a positive secondary market sentiment leads to primary market activity picking up," Devang Mehta, Director - Equity Advisory at Spark Capital Private Wealth Management said.

He further said one thing important to note was after eight years, the market has seen the most amount of fresh capital being raised. "About 42 percent of the money raised is fresh capital and the balance 58 percent is offer-for-sale (OFS). The last four years the comparable number of OFS was around 85 to 90 percent."

Hence, "I don’t see any reason for this to get disrupted in 2024. Though the IPOs are getting oversubscribed hugely, there has not been a very large IPO which sucks out liquidity and creates a euphoric scenario," Mehta added.

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