28 Indian Companies Will Launch IPOs Worth Rs 45,000 Crore In Apr-Jul FY23! SBI Gives Approval

A nod to raise funds totalling Rs 45,000 crore through initial public offerings (IPOs) in April-July period of 2022-23 has been given by SEBI to 28 companies. 

Notably, the period has already seen 11 debutantes raising over Rs 33,000 crore. The firms which have SEBI’s nod include the likes of Lifestyle retail brand FabIndia; Bharat FIH, a subsidiary of FIH Mobiles and a Foxconn Technology Group; TVS Supply Chain Solutions; Blackstone-backed Aadhar Housing Finance; Macleods Pharmaceuticals and Kids Clinic India, which operates super-specialty mother and babycare chain Cloudnine.

Challenging Market Conditions & Other Reasons

Merchant bankers said that due to the challenging market conditions, these firms are yet to announce the launch date of their IPOs and are waiting for the right time to float their issues.

Prashant Rao, Director and Head Equity Capital Markets, Anand Rathi Investment Banking, said that companies with approvals in hand are waiting for the right window of opportunity to launch the initial share-sales due to the challenging market conditions. Many of the companies have concluded the roadshows and are waiting for the right time.

To tap the IPO route for fundraising during April-July 2022-23, total 28 companies obtained the regulator’s clearance. These firms are expected to mop up Rs 45,000 crore together.

11 companies that have gone public this year and garnered 33,254 crores. Out of this 61% or Rs 20,557 crore was raised alone by LIC.

All these companies hit the primary market during April-May and not a single public issue was launched after May, suggesting a dry spell in the IPO market.

In 2021-22, as many as 52 companies tapped the primary market to raise a record Rs 1.11 lakh crore. It could be due to reasons like new age loss-making technology startups, strong retail participation and huge listing gains.

According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the lackluster IPO scenario could be due to the reasons like sharp correction in secondary market. Also, new digital companies, like Paytm and Zomato failed disastrously in the market. Not to forget the poor performance of LIC which negatively impacting the sentiments.

Investors are wary of new IPOs due to reasons like volatility in the markets and certain issues facing pricing performance said Anand Rathi Investment Banking’s Rao.

The Second Half Of This Fiscal May Expect Some Issues

On the other hand, as per Abhijit Tare, MD and CEO, Motilal Oswal Investment Advisors, markets are now recovering mathematically as well as sentimentally.

Based on the merit of their proposals, a few of the IPOs will get through in the next 2-3 months. He said that in the remaining part of the fiscal year, good amount of fundraising is expected to happen. 

Rao is hopeful about the second half of this fiscal year and said that there could be a few windows for issues to happen.

For the last two months, there has been a spike in number of companies for filing preliminary IPO papers.

Total of 15 companies which include the likes of Sula Vineyards, Allied Blenders and Distillers, Utkarsh Small Finance Bank, and Sai Silk Kalamandir, approached Sebi with their draft papers to garner funds through initial share-sales.

Motilal Oswal Investment Advisors’ Tare said that in the private domain there is a lot of discussion. He also said that the promoters from small towns and cities have been doing a business and growing them but it is now that the thought of monetizing their efforts is crossing their minds.