scorecardresearchIndian IPO market witnessed significant slowdown in Q4FY22, June quarter

Indian IPO market witnessed significant slowdown in Q4FY22, June quarter likely to be better: EY report

Updated: 20 May 2022, 08:30 AM IST
TL;DR.

The report stated that in the March quarter (Q4FY22), 16 firms launched their IPOs raising $995 million.

The report stated that in the March quarter (Q4FY22), 16 firms launched their IPOs raising $995 million.

The report stated that in the March quarter (Q4FY22), 16 firms launched their IPOs raising $995 million.

After record-breaking IPO activity in 2021, a significant slowdown is seen in IPOs in the first quarter of 2022 mainly on the back of market volatility and weak domestic and global cues, a report by global accounting firm EY said.

The report stated that in the March quarter (Q4FY22), 16 firms launched their IPOs raising $995 million. In comparison, 23 IPOs were launched during the same period last year raising $2.57 billion, showcasing a decline of 60 percent in funding raised and a decline of 82 percent in the number of deals in Q4FY22, highlighted the report.

According to the report, the decline comes on the back of a range of issues, including geopolitical tensions, stock market volatility, price correction in over-valued stocks from recent IPOs, growing concerns about a rise in the commodity and energy prices, the impact of inflation and potential interest rate hikes and COVID-19 induced lockdown.

It noted that the three largest Indian IPOs to launch in the March quarter were Adani Wilmar, Vedant Fashions and AGS Transact Technologies.

Adani Wilmar raised around 3,600 crore in its IPO followed by Vedant Fashions which raised 3,150 crore and AGS Transact Tech raising 680 crore.

Among sectors, consumer products and retail were the most active followed by the diversified industrial products, it added.

“The IPO momentum of a blockbuster 2021 has not carried over to 2022 so far. Issuance and proceeds are well off last year's pace, as geopolitical uncertainty along with other macro factors continues to affect investor sentiment,” said Sandip Khetan, Partner and Financial Accounting Advisory Services Leader, EY India.

Going ahead EY expects to have a strong pipeline for IPOs in the June quarter (Q1FY23) as 20 companies have filed their DRHPs in the March quarter.

“In line with the sharp decline in global IPO activity, there was a considerable fall in cross-border, unicorn, mega (proceeds above $1 billion) and SPAC IPOs. There were also several IPO launches postponed due to market uncertainty and instability,” the report noted.

 

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First Published: 20 May 2022, 08:30 AM IST