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BW Businessworld

The Return Of The IPO

Apart from the significantly high number of IPOs this year, what was noteworthy is that companies across diverse sectors including airlines, restaurants, pharmaceutical and electronics made their way into the IPO space.

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The roller-coaster ride notwithstanding, the Indian stock market showed a robust appetite for new issues this year, marking the revival of the initial public offering (IPO) market after a lull of three years. This brought much-needed relief to all stakeholders including corporates who had so far shied away from tapping the capital market, existing investors who had been diligently waiting for an exit route for their investments and of course, the investors on the bourses.

There were a slew of IPOs this time that raised investor interest. These included the much talked about issues such as IndiGo’s parent InterGlobe Aviation, drug maker Alkem Laboratories, Coffee Day Enterprises which runs the Cafe Coffee Day chain, among others. Then there were Inox Wind, a wind power solutions provider and digital cinema distribution network UFO Moviez India. In the healthcare space, there were IPOs from companies such as Dr LalPathlabs and NarayanaHrudayalaya.

There are several others planning to come up with their issues soon and have filed their Draft Red Herring Prospectuses too.

Apart from the significantly high number of IPOs this year, what was noteworthy is that companies across diverse sectors including airlines, restaurants, pharmaceutical and electronics made their way into the IPO space.

According to capital market research firm Prime Database, the number of IPOs was expected to touch 63 this year from 45 during the last calendar year. While the increase in the number of IPOs was hardly dramatic, the total sum expected to be raised this year was several times higher in terms of value --- Rs 13,854 crore as against Rs 1,468 crore in 2014. This shows that the issues that hit Dalal Street in 2015 were of sound companies that have good fundamentals and equally good corporate governance in place. During 2013, as many as 38 IPOs had raised Rs 1,619 crore.

The year ahead could see a continuation of this trend. Currently, there are about 20 more companies that have got the approval of the market regulator to launch their IPOs or follow-on offerings. Also, this positive trend is expected to boost pre-IPO placements and rope in private equity investors as there are already signs of exit routes available.

All in all, this is one space that you must definitely watch out for as it is expected to witness significant action. Stay tuned!

(This story was published in BW | Businessworld Issue Dated 11-01-2016)


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