Sharp weakness in the equity market seems to have dampened the primary market mood for the near term as there will be no new IPO launch in the coming (Diwali) week starting from October 28.
The Nifty 50 plunged 8 percent from its record high of September 27 due to severe selling pressure from FIIs, muted quarterly earnings and geopolitical tensions, and is likely to see more bearish trend in the coming days amid caution ahead of US elections.
According to experts, near term concerns in the equity market is most definitely likely to delay IPOs, but will not affect the IPO plans of several companies as they believe post pricing in the current risk factors, the market mood may change in November and as a result, the slew of pending IPOs may start flowing in again with 2025 expected to be better year than 2024.
Amit Jain of Ashika Global believes that the IPO fundraising landscape in 2025 will likely surpass that of 2024, with projections indicating a robust pipeline as market conditions stabilize. While 2025 holds promise, the immediate outlook is tempered by current market dynamics, he said.
In the current year 2024 so far, 69 companies raised Rs 1.18 lakh crore through their initial public offerings (excluding ongoing Afcons Infrastructure IPO). Including SMEs, the total fund raising via IPOs has been Rs 1.26 lakh crore in the current year, which is far better than the previous year (of nearly Rs 58,000 crore).
Coming back to the primary market update for next week, Shapoorji Pallonji group-owned engineering and construction company Afcons Infrastructure will close its Rs 5,430-crore initial share sale on October 29. So far it has seen muted response from investors, subscribing just 10 percent on the first day of bidding on October 25.
In the SME segment, the subscription for Rs 98.5-crore IPO of Usha Financial Services will close on October 28. In last two days, it was booked 3.13 times.
The excitement is expected to be on the listing front as the much awaited Waaree Energies along with Deepak Builders & Engineers India is scheduled for debut on October 28, while the trading in Godavari Biorefineries shares will commence on the bourses, effective October 30.
Solar photovoltaic modules maker Waaree Energies' IPO shares attracted 80-85 percent premium in the grey market over the upper price band of Rs 1,503 per share, while Deepak Builders shares traded at more than 15 percent premium but Godavari Biorefineries shares are not getting any premium, the market observers said.
The grey market is an unofficial market wherein IPO shares can be bought and sold till the listing on bourses. Generally, the participants look at the grey market premium to know the possible listing price.
In the SME segment, Premium Plast will debut on the NSE Emerge effective October 28. Danish Power, United Heat Transfer, and OBSC Perfection will list their shares on the same exchange on October 29, while the trading in Usha Financial Services shares will commence effective October 31.
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