IPOs market buoyant in August with Rs 15,200 crore mainboard, Rs 1,345 crore SME fundraising

markets

The primary market activity maintained its buoyancy in August, as participation from both domestic and foreign investors across the mainboard and SME segments remained robust, yet most of the listing gains have been modest, indicating a cautious sentiment.

On the mainboard, 13 companies launched initial public offerings, mobilising Rs 15,200 crore during August, as against Rs 16,124 crore in July and Rs 17,688 crore in June. The SME space saw 28 companies tap the market and raise Rs 1,345 crore, which is the highest fundraise in the segment since September 2024. This compares with Rs 1,205 crore garnered in July and Rs 1,300 crore in June.

Analysts said the surge in IPO activity was owing to increased allocations from both foreign and domestic investors who scouted for opportunities in the primary market as valuations in the secondary market have been stretched. For many, new issuances offered attractive entry point into fundamentally strong businesses. Yet, with most issues priced at a premium, listing day gains have been limited.

“Very select IPOs are priced reasonably and hence they tend to offer listing gains,” said Sunny Agrawal, Head of Fundamental Equity Research at SBI Securities. He added that only a handful of unique businesses with clear growth potential and competitive moats have been able to sustain follow-up buying after listing, citing examples such as All Time Plastic (proxy play for Ikea), M&B Engineering (expansion in the pre-engineered building segment), Aditya Infotech (CP Plus brand equity in security cameras), Shanti Gold (B2B jewellery play), NSDL (institutional market leader), and Anthem Biosciences (growth potential in the CRDMO segment).

Among mainboard offerings, Knowledge Realty Trust emerged as the largest IPO in August, raising over Rs 4,200 crore, followed by JSW Cement, which mobilised around Rs 3,600 crore and Vikram Solar which raised around Rs 2,080 crore. Other notable issues included BlueStone Jewellery at Rs 1,540 crore and Kiran Engineering, which raised Rs 772 crore.

In the SME segment, Flysbs Aviation led the charts with nearly Rs 103 crore, followed by Connplex Cinemas and Sugs Lloyd, which collected Rs 91 crore and Rs 86 crore, respectively. Other prominent SME listings included Studio LSD, Shivashrit Food and Anondita Medicare, each raising around Rs 70 crore.

Narinder Wadhwa, Managing Director & Chief Executive Officer of SKI Capital Services said unlike earlier phases when hefty listing premiums were common, August has seen modest gains. “This reflects a more cautious undertone among investors. While they are keen to participate in new issuances, expectations are being moderated in light of global headwinds and domestic market sluggishness,” Wadhwa added.

The secondary market, by contrast, remained subdued through August, weighed down by global uncertainty and restrained investor sentiment. Trump's tariffs on trading partners, coupled with ongoing geopolitical risks have clouded the outlook for global trade and economic stability, prompting risk aversion.

Market experts believe the divergence between a buoyant primary market and a sluggish secondary market is unlikely to sustain for long. A revival in listing gains will require stronger participation in the secondary market, contingent to easing geopolitical tensions and the return of foreign flows. Until then, markets may stay in consolidation mode with selective participation in quality IPOs but restrained enthusiasm in equities.

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