Should You Join The IPO Rush?

What do companies such as IdeaForgeTech, Mankind Pharma, Utkarsh Small Finance Bank and Honasa, the parent company of Mamaearth have in common?

- PRIYA KAPOOR

No they are not in the same line of businesses. Their business models are poles apart. But one thing that binds them is the fact that they have all raised capital by going public this year.

With 149 listings, India logged the most number of IPOs this year till September, according to a study by EY. In comparison, there were 144 IPOs by Indian companies during the whole of 2022, which included listing by large as well small and medium enterprises.

The September quarter of 2023 saw a staggering 21 IPOs on the main platforms of the bourses, compared to just four in the same quarter of 2022. The proceeds raised during the quarter by these companies amounted to $1.7 billion, an increase of 376% from $372 million in the year-ago period, EY said. The small and medium enterprises (SME) segment also recorded significant success by raising US$ 165.76 million via 48 IPOs in Q3 2023.

If one looks at the overall response from the public to these IPOs, it has been good. It got further buoyed by strong listing performance. Average listing gain increased to 29.44 per cent, in comparison to 11.56 per cent in the first half of 202223. Of the 28 IPOs which have got listed thus far, 20 gave a return of over 10 per cent. Ideaforge gave a stupendous return of 93 per cent followed by Utkarsh Small Finance Bank (92 per cent) and Netweb Technologies (82 per cent). "Response from investor's frenzied IPO participation with healthy listing premium & entrepreneurs getting their valuations unlocking significant value has worked as a win-win till now," says Dennis Gabriel, Partner, Upwisery.