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Moneycontrol Pro Panorama | It’s all adding up as IPOs take centre stage

In today’s edition of Moneycontrol Pro Panorama: IPO rush hour, liquidity line for startups, NMDC stake sale, price tag for carbon, the oil worries, a McKinsey paper and more

July 07, 2021 / 02:59 PM IST

Dear Reader,

The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.

Two new share sales are opening today – Clean Science and Technology, and GR Infraprojects.  By mid-day, investors had already bid for 58 percent of the speciality chemicals company and 70 percent of the latter. You can read our research team’s recommendations on these two IPOs here and here.

(The team’s other stock analyses of the day are Tata Steel and Hawkins Cookers.)

Clean Science, in particular, could be in a good spot because there are a lot of tailwinds favouring the chemicals industry in India such as the China plus One sourcing strategy adopted by many user industries across the globe. Domestic firms are gaining scale in chosen products and market share, and this is reflected in the rising stock prices and growth expectations of these firms, we point out in another piece today.

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Even apart from the chemicals sector, it’s been a good year for IPOs despite the pandemic. As a Moneycontrol analysis showed last week, at least 40 companies listed since March 2020 and one in four among these companies has more than doubled from its respective issue price.

With appetite showing no signs of abating, there is much scope left for fund raising. What’s more the competition for domestic investor’s money may become less if more start-ups, which are aiming to list and find it difficult to peddle their extreme cash-burning models, use the SPAC (Special Purpose Acquisition Companies) route.

Local regulators are still trying to fix rules. However, investors such as Manipal Group Managing Director Gautham Pai, venture capital (VC) fund Elevation Capital Founder Ravi Adusumalli, and Paytm Founder Vijay Shekhar Sharma are already looking at SPACs. This could pave the way for US investors to start looking at Indian companies just as they did with Chinese companies over the last decade, this piece says.

Coming back to the domestic market, the government is getting a move on in trying to meet the Rs 2.1 lakh crore disinvestment target. A stake sale in NMDC is on (you can read our analysis here).

The second thing is the shifting of the department of public enterprises to the finance ministry. This will purportedly speed up disinvestment. We will have to wait and see.

In any case, time is fast running out. The Saudi-UAE standoff at OPEC which has left oil prices hovering at three-year highs could derail the economic recovery. Investors are anyway getting a tad nervous about high valuations.

A slowdown in economic growth is also bad news when inequalities are growing. As this McKinsey study shows, the rich have been getting richer for the past 25 years.

Our FT pick of the day is on global carbon pricing and you can read our tribute to Dilip Kumar here.

Technical picks : TCS, Tata Motors, UltraTech Cement and Indian Energy Exchange These are published every trading day before markets open and can be read on the app)

Ravi Krishnan

Moneycontrol Pro

PS: The production increase in oil mentioned in yesterday’s Panorama newsletter was incorrect. The correct figure is 400,000 barrels per day.
Ravi Krishnan is deputy executive editor at Moneycontrol

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