May 2024 IPO market sees ₹9,606 crore raised by 5 firms, no discounts on listing; check details here
May 2024 saw 5 IPOs raising ₹9,606 crore, the highest in 8 months. Offers for Sale category accounted for 64 percent of total fundraising. TBO Tek had best debut performance at 55 percent premium, followed by Indegene at 45 percent.
May 2024 witnessed remarkable IPO (initial public offering) market activity with 5 firms collectively raising ₹9,606 crore, the highest in 8 months, since September 2023. The offers for sale category accounted for 64 percent of the total fundraising, approximately ₹6,200 crore, while the fresh capital issuances contributed ₹3,404 crore.
Moreover, none of the 5 IPOs were listed at a discount to their issue prices. While TBO Tek witnessed the best debut performance, listing at a 55 percent premium to its IPO price; it was followed by Indegene, which debuted at a 45 percent premium.
Meanwhile, in the other 3 IPOs, Awfis Space Solutions posted 9.9 percent listing gains, Go Digit General Insurance debuted at 5.1 percent premium whereas Aadhar Housing Finance was listed at 0 percent premium/discount i.e. same as its issue price.
Looking at individual issue sizes, four issues exceeded ₹1,000 crore. Aadhar Housing Finance had the highest issue size of ₹3,000 crore, followed by Go Digit General Insurance with ₹2,615 crore, Indegene Ltd with ₹1,842 crore, and TBK Tek Ltd with ₹1,550.80 crore. Meanwhile, Awfis Space Solutions raised ₹598.93 crore via its IPO.
Furthermore, all 5 IPOs of May were oversubscribed, one even over 100 times. Awfis Space was the most subscribed IPO in May with its overall subscription in the 3 days of bidding at 108.2. It was followed by TBO Tek, which received 86.69 times bids, Indegene at 70.3 times and Aadhar Housing Finance at 26.76 times. Meanwhile, Go Digit General Insurance witnessed the lowest total subscription at 9.6 times.
Amid a rush to list companies before the national election results, experts believe that upcoming IPO aspirants might delay their plans due to short-term volatility risks.
The primary market does not like any kind of volatility. So, until there is some stability in the secondary market, there might not be much activity in the IPO market. Most would like to assess the ramifications of a coalition government at the Centre and wait at least till the Budget in July before firming up their listing plans.
"Markets don't like any turbulence. And if there is any turbulence in the secondary market, then the primary market activity becomes tepid. There has been no certainty regarding who will come to power during the previous election cycles. This time, investors are a lot more surefooted," said Pranav Haldea, managing director of Prime Database.
"Liquidity has already been sucked out of the system due to the large number of QIPs, IPOs, etc. that we saw in the market during the past year. Hence, it seems likely that for the next few months, it will remain subdued," believes Viraj Gandhi, CEO, Samco Mutual Fund.
With the BJP falling short of a majority and having to rely on coalition partners, the new government is expected to focus more on consumption spending rather than capital expenditure.
Around 11 IPOs with issue size of more than ₹9,200 crore have received permission from the Securities and Exchange Board of India in 2024, but are yet to get listed. These include Ixigo’s parent firm Le Travenues Technology, Allied Blenders & Distillers, Asirvad Microfinance and Fincare Small Finance Bank.
"India has become the 2nd largest IPO market. With election results being out, the continuation of existing policies is highly expected which will fuel the IPO boom further. We witness significant capital to be deployed in public markets & strong demand for new-age as well conventional companies. We believe that companies with good fundamentals will go public & attract large amounts of capital from the street. The upcoming Union Budget will be a crucial trigger for understanding the new government’s strategy for the economy," said Mahavir Lunawat, Managing Director, Pantomath Capital Advisors.
In 2024, so far, 29 IPOs have raised ₹27,651 crore from market till May. In 2023, the country saw 57 IPOs with an aggregate issue size of ₹49,436 crore.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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