The stock market’s quick recovery from the Israel-Gaza conflict is giving hope to market players that the initial public offering (IPO) market will continue to boom during the rest of this financial year.
Sanjiv Bhasin, director, IIFL Securities said, “If the IPOs have enough room for giving appreciation, then definitely there is going to be appetite for that,” he added.
In the first half of the financial year, IPOs worth Rs 26,200 crore were launched. Around Rs 40,000 crore of public offers are expected in the second half of the year. These include big names like Oyo and Tata Technologies.
Currently, around 28 entities have received approval from Securities and Exchange Board of India (Sebi) for IPOs totaling Rs 40,740 crore, while 41 entities with an IPO size totaling Rs 43,659 crore are yet to receive the capital markets regulator’s nod, according to PRIME database.
The only worry that some market experts feel is that there could be some dampening of spirits if some of the IPOs do not do well.
Another important thing to note is that there could be some selling pressure on companies when anchor investors who complete one year may choose to exit.
Bhasin, however, disagreed and said that this type of selling will not happen in the market. Some of these IPOs, which had gone up far in excess as the liquidity was in an overhang, will come back to their realistic levels, he added.
Meanwhile, Lunawat doesn’t see any major challenges for the IPO market in the second half of FY24. “We do understand that lock-in for some companies is getting over in next six months but companies with good fundamentals and business models will continue to grow in sync with the growth story of India,” he said. Furthermore, domestic institutions and high net-worth individuals are betting heavily on Indian companies and this trend will follow. The state elections coming up next month could also impact investor sentiments, experts said.
The Indian stock benchmark BSE Sensex had fallen about 483 points and Nifty50 fell 141 points on Monday, however markets gained the day after as experts highlighted that the impact will mostly be contained within that region, thus reassuring the market. In addition, US Federal Reserve’s dovish comments leading to fall in bond yields and expected stimulus from China drove the Sensex by 567 points, while Nifty50 climbed 177 points on Tuesday.
On Wednesday, Sensex extended rally and closed at 66,473.05, logging an increase of 0.6% or about 390 points. NSE Nifty50 gained 0.62%, or 122 points, to close at 19,811.35.