OPPORTUNISTIC GAINS

The IPO market is poised to grow, but the appetite could be dampened by high valuations and unattractive returns

The Indian stock market has come a long way. It is no longer limited to a select group of individuals conversant with the nitty-gritties. This change is due to increased awareness, access to market news, advertising and investment product promotion, and improved market knowledge among the general public.

The primary market or the Initial Public Offering (IPO) market has become a popular and accessible investment option out of the various market segments for individual investors.

Nearly 52% of daily transactions in the market are accounted for by retail investors. Domestic Institutional Investors (DIls) and Foreign Institutional Investors (FIls) on the other hand account for close to 29% and 19%, respectively of the daily transactions in markets. This shows that retail investors are realizing the scope of returns in the markets.

Let's take a trip down memory lane to learn about the evolution of India's IPO market over the years, 14 to be precise since the launch of this magazine, and understand how things have changed swiftly and more favourably for market participants in the country.

In 2008, the sentiment in the market was quite sombre. An epoch event - the global financial crisis - had hit the market. Its origins can be traced back to bursting of the bubble in the US housing market. It spread its tentacles across most major markets.

Experts say that the 2008 global financial crisis was more serious than the Great Depression of 1929-30.

In this backdrop, 41 companies chose to raise money through the IPO route in India. An estimated 16,927 crore was raise through IPOs in 2008. It represented a fall of 63% over ₹45,137 crore that was raised in 2007 through public equity issue including both IPOs and Follow-on Public Offerings (FPOs).