NEW DELHI: A record 41 companies submitted their IPO offer document with the Security and Exchange Board of India in September 2024, the highest ever recorded in a month, as reported by Axis Capital.
Currently, 67 companies have submitted their Draft Red Herring Prospectus (DRHP) to the market and are waiting for approval, while one company is in the confidential or pre-filing stage of its DRHP.
Some of the major companies planning to go public in the coming months include NTPC Green, Hexaware Technologies, Vikram Solar, Aditya Infotech, Varindera Construction, Vikran Engineering, and Mauri Tech, reflecting the growing confidence of businesses across various sectors in accessing capital markets, indicating robust investor demand and a strong IPO pipeline.
Among the 239 IPOs listed during this period, 175 opened above their issue price, 10 at their issue price, and 33 listed below but subsequently recovered to close above the issue price by September 30, 2024.
Additionally, as of September 30, 183 IPOs continue to trade above their issue price, indicating optimistic market sentiment.
Meanwhile, 40 IPOs were listed in FY2024, with 35 of them currently trading above their issue price, reflecting a consistent performance trend and indicating sustained investor interest and confidence in new market offerings.
IPOs have proven to be a lucrative investment opportunity for retail investors, with the average listing gain standing at an impressive 27 per cent across 236 analyzed IPOs. By September 30, 2024, these gains have surged 114 per cent.
The market watchdog revealed that individual investors sold 50 per cent of the shares allotted by value were sold within the first week of listing, and 70 per cent of the shares were sold within a year.
They generally sold shares that gave positive listing gains, while retained those that listed at a loss. Interestingly, investors sold 67.65 of shares by value within a week when IPO returns surpassed 20 per cent against 23.3 per cent for IPOs with negative returns.
The policy interventions introduced by SEBI in April 2022, specifically those pertaining to the Non-Institutional Investor (NII) share allotment processes, along with the Reserve Bank of India’s (RBI) guidelines on IPO financing by Non-Banking Financial Companies (NBFCs), have had a signigicant effect on the market dynamics.
Oversubscription rates in the NII category have reduced from 38 times to 17 times and applications from “big ticket” NII investors, applying for more than Rs1 crore in IPOs, have dropped from an average of 626 per IPO prior to the policy changes to a mere 20 per IPO following the implementation of the new regulations.
