IPO Watch: The Indian IPO market remained sluggish during the first quarter of this year due to heavy turmoil in the stock market due to geo-political tensions, rising commodity prices and efforts to tighten monetary policy by central banks.
EY’s Global IPO Trend Report
According to EY’s Global IPO Trend Report, 16 IPOs were launched in the Indian stock market during the first quarter of January to March this year, as against 23 IPOs launched during the same quarter last year. During the quarter ended March this year, $995 million was raised from the IPO launch, compared to $2.57 billion during the first quarter of 2021.
60 percent decline during the first quarter this year
The amount raised through IPO has registered a decline of 60 percent during the first quarter of this year. The SME sector raised $17.5 million in capital through 13 IPOs in the quarter under review.
what are the reasons
EY says that there are many reasons for this slowdown in the IPO market. Geo-political tensions, stock market volatility, correction in the price of high-value stocks during IPO launch, rise in energy and commodity prices, rise in inflation and fear of increase in interest rate have dominated the IPO market. The COVID-19 pandemic has also slowed down the pace of economic recovery.
Capital raised from IPO
Many IPOs were also postponed due to market volatility and there was a decline in IPOs of Special Purpose Acquisition Vehicles and IPOs of unicorn companies in the quarter under review. Adani Wilmar, Vedanta Fashion and AGS Transact Technology’s IPOs raised the most capital during this period, while consumer products and retail were the most active sectors.
Unicorn status to more than ten companies during the first quarter
EY said more than ten companies got unicorn status during the first quarter of this year due to the increase in activity in the private market. Private equity and venture capital investments were also good. Investments more than doubled to $10.3 billion in January-February 2022 from $4.1 billion in the same period last year.
The country’s biggest IPO will be listed tomorrow
With this amount, LIC’s IPO has proved to be the biggest IPO of the country so far. Before this, Paytm’s IPO, which came in 2021, was worth Rs 18,300 crore. Prior to that, in the year 2010, the IPO of Coal India was about Rs 15,500 crore.
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