After the easing of lockdown restrictions, companies are rushing in to go public with the stock market witnessing low volatility, which is conducive for fund-raising. This surge is triggered by strong demand from IPO starved retail investors and quality offers from good companies at attractive prices. Between April and June, no IPOs hit the market due to lockdowns and the reopening that gave limited leeway for businesses to operate. Then there was just one IPO in July: Rossari Biotech, which raised £49.6 million. Again, August drew a blank in terms of fundraising through the primary market route.
September has seen two successful IPOs: Happiest Minds Technologies, which listed last week and Route Mobile, slotted to list on Monday. Three more IPOs are set to be launched this month. On Monday, the £224.2 million offer by CAMS, which services a majority of mutual fund houses as their register & transfer agent (RTA), and the £3.1 million offer by Chemcon Speciality Chemicals will be launched. Then, one of India's leading stock brokers Angel Broking is set to open its £60 million offer, merchant bankers said.
Two more companies are also on the verge of launching their IPOs soon: UTI Mutual Fund, the oldest fund house in India, and Mazagaon Dock Shipbuilders, the government-owned company that specialises in building warships and submarines.
The debut by Rossari Biotech and Mindspace REIT in July instilled faith in the investors, according to Hemang Jani, head (equity strategy, broking & distribution), Motilal Oswal Financial Services. Subsequently in September, these listings were followed by listings of Happiest Minds and Route Mobile, he said.
“In the last five months, several new retail investors have come into the market. Since there had not been any lucrative offers since March, these investors participated heavily in the recent IPOs. They were attracted by strong grey market premium, which has the potential to give substantial listing gains,” Jani said. “Further, the IPOs were good offers that came after a long time.”
In 2020 so far, about £1.22 billion has been raised from four offers but the same has been skewed by the £1.04 billion SBI Cards IPO. Other than the credit card company’s offer, only £179.8 million has been raised from three listing offers. In comparison, in 2019 over £1.2 billion was raised from 16 IPOs. Other than the IPOs on the main platforms of the stock exchanges, Mindspace Business Parks also had its IPO in July for listing its real estate investment trust (REIT) through which it had mobilised £450 million.
