garnering interest-free Money
India is coming back to the 1980–90 IPO age when Bull & Bear was ruling the Primary Market, It’s the year of IPOs, with Indian companies about to raise record-breaking capital from the market. Only for the year 2017–18, the figures raised from the primary market was 67,000 crore in USD of 9 Billion. The Haul for 2021 will be bigger as per as record 38 companies have already scooped out a 63,000 crore clocking in for USD 8.5 Billion and its yet to finish the year with 4 more months to go, and in waiting are 40 + companies with filled pagers with SEBI with preliminary approval for the 13 companies to go with the belling in the ceremony. Uttar Pradesh has got a special package for the companies registered in India Uttar Pradesh to have special preferences and speedy approvals on tabling the Initial Public Offering IPO.
Interestingly some of the upcoming IPOs are new age which Includes technology firms known for their brand of bang listing, with obscene valuation and oversubscription, the new age investor needs to exercise caution, broadly IPOs help raise interest-free capital and unlock the exit door for sitting shareholders. There is another category which investors must avoid where companies simply try to capitalise on the market frenzy data compiled by capital minds show that one in every four companies that went public during the 2010 boom ceased to exist one out of every two are trading below the issue price even a decade after going public.
All this in turn is attracting retail investors, who are weighed down by the twin evils of negative real returns on deposits and falling incomes. Binding by the equity Market prospects, some three crore new Demat accounts were opened in just one year again the highest annual churn taking the tally to eight crores as of June. While stock markets do offer attractive returns they come with hidden and unforeseen risks and investors should get unduly swayed. The new Demat account opened is an eyeopener on the IPO market systematically gaining a stronghold in the market as BSE, NSE and other platforms augmented with GenNext technology of predictive trading and Covid-19 giving it a new flavour of working from home and invest quality time on your screen.
Clearly, the ongoing IPO rush is partly influenced by soaring benchmark indices and the wall of liquidity provided by the central bank. In some cases, HNIs and institutional investors are the driving force taking valuations to dizzying heights. A case in point is the recent listing of Zomato whose IPO was oversubscribed nearly 39
In the month of September, we are in, Two companies are planning to launch their initial public offerings (IPOs) which are Auto component maker Sansera Engineering & Markoline Traffic Controls Limited. Sansera Engineering IPO will open on September 14 whereas that of Markoline Traffic Controls is expected to launch on September 15, and the three-day issue of the two firms will conclude on September 16 and September 20 respectively.
One is into Auto and the other is into Construction, Auto has a brand dent because of FORD exiting India but Construction sees a good scope because of the planning of Nitin Gadkari, the exit of FORD can be also tagged to the EV model proposed by the ministry.
