MUMBAI: The second half of June has seen a raining of IPOs as the primary market activity sharply rebounded after a drought in the previous two months. The current month has seen eight large IPOs, led by the largest NBFC issue in HDB Financial’s Rs 12,500 crore issue, and as many as 30 SME issues hitting the street raising over Rs 19,000 crore.
Eight mainboard IPOs have collectively raised around Rs 17,700 crore (only HDB is ongoing and closes Friday and all other issues have already been closed), the highest monthly fundraising via IPOs in the past six months. In the SME segment, the month saw as many as 30 IPOs, raising around Rs 1,330 crore, a nine-month high.
The SME space activity is interesting as the Sebi has done a lot of regulatory tightening after many incidents of fund miss-use and price-rigging at the pre-issue level by promoters and i-bankers.
Analysts attribute the surge in IPOs to the regulatory timelines imposed by Sebi, prompting companies to expedite listings to avoid re-filing amid market uncertainty.
The mainboard IPOs are Rs 12,500 crore issue from HDB Financial Services- making it the largest ever IPO in the non-banking financial companies space, followed by Kalpataru Projects (Rs 1,590 crore) and Oswal Pumps (Rs 1,387 crore). The HDB issue which opened Wednesday comprises Rs 10,000 crore in offer for sale by HDFC Bank and Rs 2,500 crore in fresh issue which is closing Friday and the company will begin trading from July 2.
The other issuers include Ellenbarrie Industrial Gases (Rs 852 crore), Sambhv Steel Tubes (Rs 540 crore), Arisinfra Solutions (Rs 500 crore), Rs 200 crore issue from Indogulf Cropsciences, and Globe Civil Projects’ Rs 119 crore issue. Together these companies have raised Rs 17,688 crore from the market.
Among the largest SME issues are Safe Enterprises Retail Fixtures (Rs 161 crore), Pushpa Jewellers (Rs 94 crore), Monolithisch India (Rs 82 crore), Neetu Yoshi (Rs 74 crore), Patil Automation (Rs 66 crore), Sacheerome (Rs 58 crore), Cedaar Textile (Rs 58 crore), and Influx Healthtech (Rs 56 crore), among others.
Earlier in the year, the IPO activity had slowed considerably due to weak sentiment and escalating geopolitical tensions. Several companies, despite securing Sebi approvals, chose to defer their issues waiting for better market dynamics. However, improving macro indicators, including easing inflation and renewed foreign institutional investor inflows, have lifted sentiment from June.
Despite the pickup in activity, investor response has remained largely subdued, weighed down by concerns over stretched valuations and muted earnings prospects.
Dalal Street saw sharp volatility in May and June, initially triggered by the India-Pakistan military conflict and later by the Israel-Iran war in the second half of June. Though domestic institutional investors have been supporting both primary and secondary markets, persistent selling by foreign funds kept the market sentiment clouded and choppy.