RETURN OF IPO OPTIMISM

Companies have lined up plans to raise more than Rs 1 lakh crore from the Indian bourses over the next 6-7 months buoyed by a resilient economy, a bullish stock market and growing investor confidence

- Ashish Sinha

CONSIDER THIS: some 78 companies are looking to raise more than Rs 1 lakh crore from the primary market this year. Of these, 54 companies with plans to raise Rs 76,189 crore already have the listing nod from the market regulator, the Securities and Exchange Board of India (Sebi), while the remaining 24 companies that are looking to raise more than Rs 35,000 crore are awaiting the green signal.

There is huge activity on the demat account opening front as well. As of April-end, demat accounts totalled more than 11.6 crore, having risen sharply from 4 crore in 2019. On an average, 15-20 lakh new demat accounts are getting added every month. For the uninitiated, demat accounts are necessary for holding investments like shares, bonds, government securities, mutual funds, insurance and ETFs.

“There is a robust pipeline for IPOs in the second half of calendar year (CY) 2023 and beyond in India. After the interim pressure on market sentiments in the first quarter, there has been a rebound in the second quarter with broad indices near life-time highs again and a good momentum being seen in primary market as well,” says Nikhil Shah, Director at Beeline Capital Advisors and a chartered accountant by training.

“The Indian public has started diversifying from the traditional investment model to equity investment. Earlier, India was more of a savings economy but now gradually it’s becoming a spending economy which is an obvious sign of accelerated growth of Indian companies,” Shah adds.

Many of the companies that have received Sebi approval, including Tata Play, Cyient and others, are ready to hit the primary market soon. What is giving them the confidence?