IPO Fundraising Hits 27-Month High in August

IPO Fundraising: The Indian IPO market got off to a slow start this year because of the anxiety surrounding the elections. However, it has quickly recovered. In August, 10 companies raised a total of Rs 17,048 crore, which was the most in 27 months.

The fundraising frenzy in August was the busiest time on the main market since May 2022.

It is estimated that about Rs 9,715 crore, or 57% of the money raised in August, came from new issues of shares. The other Rs 7,333 crore came from sales of shares.

Analysts say that the rise in fundraising is due to a strong economy, a rise in the stock market, and earnings that were higher than expected, which made more companies want to go public.

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Initial public offerings (IPOs) moved more slowly in the first quarter because of domestic elections. However, they picked up in the second quarter because of positive political outcomes, expectations of policy continuity, pro-growth government measures, and expectations of an interest rate cut by the US Federal Reserve this month, which is pushing financial markets around the world, including in India.

Prashanth Tapse, Senior VP and Research Analyst at Mehta Equities, said, “High liquidity, strong performance on the secondary market, and strong listing performance of recent IPOs are giving investors a lot of confidence to participate in initial public offerings.”

“Most of the issues are seeing strong subscription demand followed by healthy listing gains,” Tapse said. “This is mostly due to reasonable ask valuations and favorable market conditions, which give promoters and investors confidence to raise and invest.”

He also thinks that promoters and pre-IPO investors like private equity investors are seeing this market mood as a chance to make money with better-than-expected prices that give them a chance to book profits.

In August, the Indian markets achieved their highest levels ever. The Nifty experienced an increase in value for 14 consecutive sessions.

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Brainbees Solutions and Premier Energies were the second and third-placed IPOs, respectively, with a total revenue of approximately Rs 6,145 crore. Ceigall India, Bazaar Style Retail, ECOS India Mobility & Hospitality, and Interarch Building Products were some other well-known IPOs.

With prices so high in the secondary markets, investors are drawn to the main market, where most IPOs sell out on the first day.When a new IPO went public, investors made a lot of money. This makes more investors want to buy shares.

Returning to the stock market is a goal of many companies. The Securities Board of India received “red herring” prospectuses drafted by 25 companies in August.

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