IPO Rush Amidst FPI Holiday Season: A Market Buzz Worth Rs 8,000 Crore

The market frenzy is palpable as the IPO rush takes center stage, poised to raise a staggering Rs 8,000 crore within a week. More than half a dozen companies are gearing up to launch their initial public offerings (IPOs), marking an unprecedented surge in the market landscape.

As the holiday spirit looms large, the financial arena is abuzz with notable IPO launches. DOMS Industries and India Shelter Finance kickstarted this wave with IPOs amounting to Rs 1,200 crore each. The overwhelming response, with subscriptions soaring multiple times, reflects the investor enthusiasm for these offerings. Following suit is the impending debut of Inox CVA, boasting the largest IPO in this cohort at Rs 1,459 crore, scheduled to open its gates this Friday.

Notably, this IPO rush breaks the historical trend, notably absent during previous Decembers, especially preceding General Election years. Data from Prime Database, an IPO tracker, reveals a void in IPOs during Decembers of election-sensitive years like 2008, 2013, and 2018. However, the tide has turned in 2023. Despite initial political uncertainty amid state elections, the recent victory of the Bharatiya Janata Party in three out of five states has positively shifted the market sentiment. Investors anticipate policy continuity, fostering a favorable climate for IPOs.

Traditionally, December is a subdued month for capital infusion due to the holiday season. Yet, companies are racing against the clock to conclude their IPOs before the imminent slowdown in foreign portfolio investor (FPI) flows. The substantial FPI investment of Rs 31,471 crore in December so far underscores the urgency felt by companies to tap into this momentum.

Diverse Workforce Composition Amidst IPO Rush

Ajay Garg, founder of Equirus, sheds light on this unprecedented market fervor. He emphasizes the symbiotic relationship between the secondary market buoyancy and the rush of primary market participants in offering IPOs. Garg highlights the significant involvement of private equity (PE) portfolios, driving companies towards IPOs to provide exits for PE investments.

A critical trend emerges within this Initial Public Offer surge—over half of the total issue size comprises secondary sales. Inox CVA and India Shelter Finance exemplify this trend, where stakeholders, including promoters and PE players, are offloading their stakes. Companies like Happy Forgings and Muthoot Microfin opt for a blend of primary and secondary share sales. Conversely, Suraj Estates and Motison Jewellers are venturing with entirely fresh issues.

While certain IPOs like Apeejay Surrendra Park Hotels and Medi Assist Healthcare have received the green light from market regulators, investment bankers anticipate a lull in share sales between December 22 and January 7, barring urgent launches.

The timeline of IPOs also aligns with FPI holidays, influencing the urgency witnessed in the current rush. Garg emphasizes the meticulous planning and regulatory compliance driving these timelines, shaping the Intial Public Offer landscape.

As the market witnesses this unprecedented surge in Initial Public Offer activity, investors and companies alike are capitalizing on the buoyant secondary market and favorable political outlook. With the impending IPO launches, the financial arena brims with anticipation, marking a remarkable departure from the typically muted December landscape.

This Initial Public Offer frenzy isn’t just about companies entering the public domain; it’s also an opportune time for non-promoter shareholders to make strategic moves. Among those selling their shares, notable names such as Ishita Jain, Manju Jain, Lata Rungta, Bharti Shah, Kumud Gangwal, Suman Ajmera, and Rajni Mohatta are looking to divest. Each of these shareholders is set to sell 13,400 shares, positioning them to leverage this market enthusiasm.

Beyond the financial mechanics of this Initial Public Offer rush, let’s delve into the heart of these companies. The human capital driving these organizations is staggering, employing nearly 400 engineers and a workforce of 1,200 individuals. What’s particularly noteworthy is the inclusion of seven young women welders within this workforce, underscoring a commitment to diversity and inclusivity in traditionally male-dominated sectors.

The presence of these young women welders not only highlights the company’s dedication to inclusivity but also mirrors the broader societal shift towards gender equality in professions that have historically seen gender imbalances. It’s a testament to the company’s progressive ethos and its proactive stance towards fostering an equitable workplace.

As these IPOs unfold, it’s not just about the financial transactions; it’s about the people, the stories, and the strides made towards a more diverse and representative workforce. Amidst the rush of numbers and market movements, these human elements serve as a reminder of the impact these companies have, extending beyond the balance sheets.