India's primary market is set for a busy next week, with 12 companies—four main board listings and eight SME issuances—aiming to raise more than Rs 8,600 crore ($1 billion) as they seek to take advantage of favourable investor sentiment.
Among the main board IPOs, the four firms that will vie for investor attention are Bajaj Housing Finance, which will raise around Rs 6,560 crore, Tolins Tyres (Rs 230 crore), Kross Ltd (Rs 500 crore) and P N Gadgil Jewellers (Rs 1,100 crore).
Another main board IPO, Western Carriers India, is likely to open soon though the company has yet to disclose a specific timeline for the offering.
While Bajaj Housing Finance, Tolins Tyres and Kross Ltd will open for subscription on September 9 and close on September 11, P N Gadgil Jeweller IPO will open on September 10 and close on September 12.
Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities, highlights several factors driving the positive trend in India's primary market. The current market buoyancy is fueled by broad investor participation with retail investors eager to capitalise on attractive listing gains, spurred by the strong performance of the secondary market -- Nifty is up 15.71 percent in the current calendar year till date.
Additionally, robust liquidity among both domestic and foreign institutional investors has significantly bolstered the IPO market pipeline.
Incidentally, the grey market premiums (GMP) for these firms are also surging. Bajaj Housing Finance GMP is trading at Rs 51 a share, up 73 percent from its upper end price band of Rs 70 a share, Tolins Tyres GMP is trading 12 percent higher while P N Gadgil Jewellers IPO is trading over 37 percent higher.
Among SME IPOs, four companies -- Gajanand International, Share Samadhan, Shubhshree Biofuels Energy and Aditya Ultra Steel -- will open for subscription on September 9 and close on September 11.
Two firms -- Trafiksol ITS Technologies, SPP Polymer -- will open on September 10 and close on September 13 while another two -- Innomet Advanced Materials and Excellent Wires & Packaging -- will open on September 11 and close on September 13. These firms will raise between Rs 12-45 crore each through their public issues.
The recent past has seen IPOs attracting huge subscriptions. Among main board IPOs in August, the average subscription was over 75 times, while the average for 2024 so far stands at 66 times. For SME IPOs, the average subscription in August reached 290 times, with a year-to-date average of over 259 times.
The strong subscription across IPOs has been driven by robust participation from retail, institutional, and foreign investors. Data from NSDL shows that while foreign investors have been net sellers in secondary markets, they have consistently invested in primary markets. In August, FIIs invested around Rs 12,872 crore, and so far in CY24, their investments in primary markets have totalled around Rs54,883 crore.
Analysts note that most recent IPO offerings are emerging from high-growth, sunrise sectors, thereby attracting investors anticipating strong growth potential. This trend is expected to continue through the rest of 2024 and may extend into 2025, they say.
“With growing retail participation and renewed interest from FIIs, driven largely by evolving global macroeconomic conditions, the market environment seems favorable for several upcoming IPOs to finally make their debut on the bourses. The recent success of multiple listings is likely to generate even greater interest in the next wave of IPOs,” says Nirav Karkera, Head of Research at Fisdom.
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