Thu. Mar 28th, 2024
IPO

The initial public offering (IPO) in the Indian market is expected to go high in 2020. The market participants expect a larger number of financial companies to list shares next year to raise funds or meet regulatory requirements amid the nation’s ongoing crisis in non-banking lending.

The data compiled by Bloomberg says that total 14 mainboard IPOs have grown by an average of more than 50% this year since the day of listing. The S&P BSE IPO Index has climbed 36% in 2019, compared with a gain of 13% for the benchmark S&P BSE Sensex Index. The S&P BSE IPO index is designed to measure the performance of companies listed at BSE.

Head of investment banking at Edelweiss Financial Services Satyen Shah says, ‘We expect this trend to continue in 2020’. ‘The year 2019 may look subdued in terms of the number of issues, but most of them were well subscribed and investors made good money’, adds he further.

A total of 21 companies like SBI Cards and Payment Services Ltd., UTI Asset Management Co., Computer Age Management Services Pvt. and Fincare Small Finance Bank Ltd have filed documents with market regulator Securities & Exchange Board of India for planned IPOs and are looking to raise a total of about 300 billion rupees. Out of a total 21 companies, 11 have been given the nod to tap the market as soon as next year.

The IPO of Ujjivan Small Finance Bank Ltd. was oversubscribed by 166 times, most of the time this year. The Indian Railway Catering & Tourism Corp. share in October attracted bids of 112 times the offer size.  The stock doubled on the first day of trading.

Head of equity capital markets at Kotak Investment Banking V Jayasankar says that private-equity investors who have a time horizon for their investments have started selling their shares in the public market.

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