The number of filings for initial public offerings (IPOs) has hit a record this year, surpassing the previous record set three years ago.
The total number of registrations up to October was 132, more than the 126 in all of 2021. There were 75 registrations in the September quarter alone.
Growth engines
The IPO hot streak was mainly driven by domestic liquidity and stable macroeconomic factors. High subscription numbers and a large stock market listing have boosted companies waiting on the sidelines to move forward with their IPO plans.
“The booming secondary market and robust listings through September have prompted many companies to tap the IPO market,” said Pranav Haldea, Managing Director of PRIME Database.
Sixty-eight IPOs have come to market this year, worth over ₹1.03 lakh crore, data from primedatabase.com shows.
Fifty-four of these companies finished in the green on listing day, with 13 companies posting gains of more than 50 percent. At current prices, fifteen companies are sitting with profits of 50 to 100 percent above the offer price, while another eight companies have gained more than 100 percent. The biggest gainers include Jyoti CNC Automation, up 216 percent, Platinum Industries (146 percent) and Bharti Hexacom (143 percent).
There has been a tangible increase in the speed at which IPOs are approved and launched, with companies now coming to market within a week or two of receiving regulatory approval, experts said.
Delay coming?
There were only five applications in October, amid the turmoil on the secondary market.
“If bearish sentiment continues, we could see a slowdown in IPO activity going forward. No company wants to launch an IPO when the market is volatile,” Haldea said.
However, Munish Aggarwal, head of ECM at Equirus Capital, believes the recent market correction could be a temporary blip and IPO activity is unlikely to materially slow unless volatility persists for four to five months.
The IPO pipeline remains healthy. Twenty-seven companies have received SEBI approval for their IPOs and another 61 are awaiting regulatory approval. As per estimates, these companies together could potentially raise around ₹1.36 lakh crore.
