More companies are harboring aspirations to go public, following a sharp market rebound after the massive correction in June, a report by Business Standard noted.
According to the report, in August, seven companies expecting to raise a cumulative ₹10,425 crore filed their draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) in August.
This is the amount they are looking to mop up since March when 13 companies filed their DRHPs to raise a combined ₹19,494 crore, the report revealed quoting data from PRIME Database.
Of the seven filings in August, four were by companies looking to raise over ₹1,000 crore. These included Go Digit General Insurance (estimated issue size ₹5,000 crore), Concord Biotech ( ₹2,000 crore), and Avalon Technologies ( ₹1,025 crore), it further informed.
Investment bankers told BS that the sharp up move in the market and an improvement in valuations have helped revitalise sentiment. From June lows, the benchmark indices have rebound 15 percent, defying weak global cues. Experts said that one can expect a robust IPO pipeline in the last quarter of this calendar year (CY22) and early 2023 if secondary markets remain sanguine.
In the preceding three months before August, only six DRHPs hoping to raise an average of ₹4,800 crore got filed, it added.
Only three mainboard IPOs have been launched so far this quarter due to capricious market conditions, however, with Indian markets showing resilience in the face of a global maelstrom, more companies may come forth, the report further noted.
"There have been a few good listings. Overseas investor flows have turned positive. This is fertile ground for an IPO if fittingly priced. One is far more upbeat now. In the next few months, we will see greater activity in the IPO market than in the last quarter,” observes Nipun Goel, head-investment banking, IIFL Securities.
Currently, there are over 70 companies wanting to raise a cumulative ₹1.1 trillion sitting on valid Sebi approvals to launch IPOs, according to PRIME Database. Another 50 companies are awaiting Sebi approval to launch IPOs worth ₹60,000 crore, added the report.
During the first eight months of CY22, 18 companies have raised ₹41,713 crore through IPOs. By comparison, 36 companies raised ₹60,289 crore during the same period last year, stated the report.