Till the close of the Antony Waste Handling Cell issue, the IPO count for the calendar stood at 16, which raised Rs 30,000 crore from investors, compared with Rs 12,363 crore raised by 16 companies in 2019 and Rs 30,959 crore raised by 24 companies in 2018.
December was expected to be the busiest month for the IPO market, but only three issues hit the market: those of Burger King, Mrs Bector Food and Antony Waste Handling Cell.
Other issues expected in December – Indian Rail Finance Corp, ESAF Small Finance Bank, Raitel, Nazara Technologies, Railtel, Kalyan Jewellers and Suryoday Small Finance Bank – are now likely to hit the market only in the near future.
Calendar 2020 gave average listing gains of 35.6 per cent, which turned out to be the best in 10 years. Average listing gains in 2017 and 2014 was 22.25 per cent and 21.92 per cent, respectively. For the decade, 2011 had the worst show, with average listing gains of 0.78 per cent.
Vinod Nair, Head of Research, Geojit Financial, finds the current market jubilant for companies raising funds. “Excess liquidity and listing of niche businesses have uplifted investor sentiment,” he said.
Vivek Bajaj, Co-founder of StockEdge, said reasonable valuations of issues ensured superior participation of retail investors. “IPO markets have been simpler and, hence, more attractive than other segments of equities,” he said.
Issues like Happiest Minds, Route Mobile, Chemcon Speciality Chemical and Burger King doubled investor wealth on listing, suggesting strong investor appetite and sound broader market sentiment.
The IPO chart of 2020 was led by SBI Cards and Payment Services which raised Rs 10,355 crore, followed by Gland Pharma (about Rs 6,480 crore), CAMS (Rs 2,240 crore) and UTI Asset Management Company (Rs 2,160 crore).
Nair says the primary market should continue to remain in the limelight in 2021 as well. “Companies are likely to find better valuations next year. Exit of existing shareholders and need for immediate funds prompted IPOs this year,” he said.
“The domestic IPO market is expected to remain vibrant over the next couple of years,” Bajaj said. “Investors are keenly waiting the mega IPO of insurance behemoth Life Insurance Corporation of India.
Five out of 15 IPOs of 2020 – Mrs Bector Foods Specialities, Mazagon Dock Shipbuilders, Burger King India, Happiest Mind Technologies and Chemcon Speciality Chemicals – saw subscription levels topping 150 times.
Despite market buoyancy, some companies have deferred their listing plans for now. Analysts said issues related to pandemic-affected sectors remain adjourned for the time being while consumption-related stories have been the frontrunners.
