Though the Indian stock market may have bounced back from its almost 6% decline on election day, analysts predict that those considering an IPO may wait a little longer to make their move.
Before deciding to move forward with their listing plans, the majority would want to consider the implications of a coalition government at the center and wait at least until the July budget.
The BJP's failure to secure a majority and its need to form a coalition with other parties is likely to cause the incoming government to prioritize spending on consumption over capital projects.
The main market dislikes volatility in all forms. Therefore, there could not be much activity in the IPO market until the secondary market stabilizes, according to Pranav Haldea, general director of Prime Database Group.
In a prestigious domestic business, another investment banker concurred. We are currently waiting and observing because foreign institutional investors won't arrive until policy consistency is clear. The banker stated, "One has to know whose administration is in charge and what its policies are, particularly for sensitive industries like infrastructure.
The Securities and Exchange Board of India granted clearance for around 11 initial public offerings (IPOs) totaling over Rs 9,200 crore in 2024; however, these offerings have not yet been listed. These include Allied Blenders & Distillers, Fincare Small Finance Bank, Asirvad Microfinance, and Le Travenues Technology, the parent company of ixigo.
A portion of the premium on IPO-bound stocks has already begun to decline. The day after its initial public offering (IPO) closed for subscription, Kronox Lab Sciences' gray market premium was cut in half. Following the election results, the stock was trading at a premium of Rs 40, compared to Rs 80 during its initial price range of Rs 129–136 per share. On Monday, the shares will go on sale.
Le Travenues Technology's announcement to begin its initial public offering (IPO) on Monday is wonderful news. The stock was selling on the grey market at a premium of Rs 25 to its issue price range of Rs 88-93 a share, but dealers commented that it would be interesting to see how it does given the current state of the market.
According to investment bankers, until the volatility abates and some clarity over policy continuity emerges, other issuers are probably going to have to wait for at least two weeks.
29 IPOs in 2024 have raised a total of Rs 27,651 crore from the market as of May. 57 initial public offerings (IPOs) of Rs 49,436 crore were made in the nation in 2023, based on information gathered from Prime Database.
