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<\/p>\nMore than half a dozen companies will hit the market with their initial public offerings (IPOs) between now and the end of next week.<\/p>\n
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The cumulative amount raised from these IPOs is expected to be around Rs 8,000 crore.<\/p>\n
Stationery products firm DOMS Industries and home financier India Shelter Finance’s IPOs — of Rs 1,200 crore each — got off to a flying start on Wednesday (December 13), with the former garnering over six times the subscription and the latter getting 1.5 times subscribed.<\/p>\n
Industrial gas manufacturer Inox CVA’s IPO — the largest in the current lot at Rs 1,459 crore — opened on Friday (December 15).<\/p>\n
Half a dozen other companies, including Muthoot Microfin and Suraj Estate Developers, are lined up.<\/p>\n
This IPO rush will break the jinx seen during the December preceding the General Election year.<\/p>\n
There were no IPOs in December of 2008, 2013, and 2018, while 2003 saw two IPOs, according to data provided by Prime Database, an IPO tracker.<\/p>\n
The first fortnight of December 2023 saw no IPOs amid political uncertainty due to elections in five states.<\/p>\n
However, with the state poll results seeing the ruling Bharatiya Janata Party win three out of the five states, analysts say the political outlook has turned favourable.<\/p>\n
The poll results have given investors hope for policy and regime continuity after the general elections next year.<\/p>\n
December is generally a muted month for capital raising on account of the holiday season.<\/p>\n
As a result, companies are rushing to complete their share sales before the end of next week, following which foreign portfolio investor (FPI) flows could moderate.<\/p>\n
FPIs have bought shares worth Rs 31,471 crore so far in December.<\/p>\n
“India is a very different place from the previous Decembers.<\/p>\n
“The kind of rally we see this month is unprecedented.<\/p>\n
“When you see the secondary market buoyancy, primary market participants are trying to tap into it.<\/p>\n
“A lot of companies that come with IPOs are private equity (PE) portfolios.<\/p>\n
“PE players have been investing heavily every year, and there is a lot of pipeline of PE paper that still needs to see exits.<\/p>\n
“PEs push for exits whenever they see good momentum,” said Ajay Garg, founder of Equirus.<\/p>\n
Over half of the combined issue size of the IPOs that hit the market this month comprise secondary sales.<\/p>\n
Inox CVA’s IPO is a pure offer-for-sale issue, with promoters selling stakes.<\/p>\n
Meanwhile, India Shelter Finance’s IPO will see a bunch of PE players offloading their stakes.<\/p>\n
Happy Forgings and Muthoot Microfin will be a mix of primary and secondary share sales, while Suraj Estates and Motison Jewellers are entirely fresh issues.<\/p>\n
Meanwhile, the IPOs of Apeejay Surrendra Park Hotels and Medi Assist Healthcare received the go-ahead from the market regulator.<\/p>\n
Investment bankers said that unless urgent, companies will not launch share sales between December 22 and January 7.<\/p>\n
Garg said FPI holidays are another factor for the current rush.<\/p>\n
“Companies want to get done as much as they can before December 22.<\/p>\n
“Otherwise, they will come after the first week of January.<\/p>\n
“The timelines of IPOs are a consequence of getting the paperwork done and regulatory compliance,” he added.<\/p>\n