IPO frenzy: December tops as busiest month; 15 cos look to raise ₹25,000 cr

With Christmas around the corner, the initial public offering (IPO) lane is going to be very busy as 15 companies are in queue to raise around ₹25,000 crore via primary market this month. Normally, IPO momentum drops in December, as traders globally go in holiday mode, but this year there is a flurry of new offerings as companies rushed to list their shares on domestic bourses.

So far in December, the total IPO count has reached 15, which is the highest since February 2007, when 18 companies launched their public issue. This is the busiest month of the year in terms of volume, but third biggest in value as October and November saw six and eight companies garnering ₹38,689 crore and ₹31,145 crore, respectively. But given the strong listing gains of Mobikwik and Vishal Mega Mart, 2-3 more IPOs are expected to hit Dalal Street before the year ends.

Till November, 76 companies raised a total of ₹1,34,345 via IPO route, which is the highest-ever in the history of IPO market in India. In December, 15 companies are lined up to raise ₹25,086 crore, with three of them - Vishal Mega Mart, Sai Life Sciences and MobiKwik - making debut on the stock market after garnering ₹11,614 crore.

One Mobikwik Systems, which raised ₹572 crore via IPO, made a strong debut on the domestic bourses on December 18, with its shares listing at ₹442.25 apiece, up 58.5% over the issue price. The ₹8,000 crore IPO of Vishal Mega Mart got listed at ₹110 on the BSE, up 41% over the IPO price of ₹78 on the BSE. On the other hand, Sai Life Sciences shares debuted at 20% premium at ₹600 on the BSE against the issue price of ₹549 on the BSE, after raising ₹3,043 crore.

The public issues of healthcare-focused Inventurus Knowledge Solutions (₹2,498 crore) and Blackstone-owned gemstone certification firm International Gemmological Institute India (₹4,225 crore) closed early this week, which are slated to be listed on bourses.

Meanwhile, IPOs of Ventive Hospitality, DAM Capital Advisors, Transrail Lighting, Sanathan Textiles, Concord Enviro Systems, and Mamata Machinery are set to open for subscription on December 19 and 20.

The surge in IPO activity this year can be attributed to strong listing gains and record fund inflows by foreign portfolio investors (FPIs). As per the data available on the NSDL, FPIs have invested ₹1.03 lakh crore in the Indian primary market through IPOs and Qualified Institutional Buyers (QIBs) till November, while they pumped out ₹1.18 lakh crore through secondary market during the same period.

“The reason for this dichotomy is the high valuations in the secondary market and the reasonable valuations in the primary market. It appears that FIIs are likely to turn out consistent buyers only when the market corrects further and valuations become attractive," says V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

The year is turning out to be the season of spring for new-age technology companies (NATCs), with nine startups listing their shares on the domestic stock exchanges. The renowned new-age tech firms such as Mobikwik, Swiggy, Ola Electric, Awfis, GoDigit Insurance, TBO Tek, FirstCry, Ixigo and Unicommerce raised ₹27,993 crore via IPO route, making a strong comeback after 3 quiet years.

The NATCs’ IPO fundraising is the highest since 2021, when seven big players, including Paytm, Zomato and Nykaa, garnered ₹42,826 crore through the primary market. After 2021, the next two years were a quieter period for startups, with five going public in 2023, and only three in 2022, as many of them deferred IPO listing due to valuation concerns, global tech slowdown, and weak performance of industry heavyweights Paytm, Zomato, and Nykaa.

The tally is set to rise as logistics major Ecom Express and coworking startup Smartworks having received final observation from the capital market regulator SEBI, are set to launch their IPO soon.