Bunching of public issues has been traditionally looked upon as a cause for concern for both, the primary and secondary markets as a large amount of liquidity gets stuck in the system. The initial public offer (IPO) mechanism is such that funds remain blocked for a week to 10 days and, at times, the impact is visible on the secondary markets.
The last 3-4 days, however, have been a complete contrast with no concerns visible in either the primary or secondary markets as four IPOs opened concurrently only to see huge oversubscription while the benchmark indices touched new record highs.
On Friday, IPOs of four companies – Windlas Biotech, Exxaro Tiles, Krsnaa Diagnostics and Devyani International – closed for subscription and all four issues were inundated with bids, to say the least. Meanwhile, the benchmark S&P BSE Sensex touched a new lifetime high of 54,717 on Thursday.
The huge demand for the IPOs can be gauged from the fact that the cumulative worth of all bids across the four public issues was in excess of Rs 1.71 lakh crore or more than $23 billion (a product of total number of shares bid and the upper end of the price band).
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The IPO of Devyani International saw the highest subscription at nearly 117 times with the portion reserved for non-institutional investors getting subscribed 213.06 times. Retail portion was subscribed 39.48 times, while institutions saw their segment getting subscribed 95.27 times.
Interestingly, retail appetite has been huge for all the IPOs with Krsnaa Diagnostics and Exxaro Tiles seeing their retail bucket getting subscribed 41.95 times and 40.05 times, respectively. The retail portion of Windlas Biotech was also subscribed 24.22 times, till 5pm on Friday.
Also read: IPO update: Windlas Biotech, Exxaro Tiles fully subscribed within hours of opening
On an overall basis, the IPOs of Krsnaa Diagnostics and Exxaro Tiles were subscribed 64.38 times and 22.65 times, respectively, while Windlas Biotech was subscribed 22.44 times.
The IPO market has been on fire this year, with more than 25 new companies making their debut on the bourses. More importantly, the surge in the secondary markets has ensured that a majority of the newly listed companies are trading well above their issue price. A handful of companies have also seen their share prices more than double when compared to their respective issue price.
MTAR Technologies, Laxmi Organic Industries, Easy Trip Planners, Barbeque-Nation Hospitality, Stove Kraft, Nureca and GR Infraprojects have been among the best performers among the companies that listed on the bourses in 2021.
Going ahead, some big-ticket offerings are in the pipeline as the current calendar year is all set to hit a new record in terms of funds raised through IPOs. It is expected that this year could see a total fundraising of Rs 1 lakh crore for the first time ever.
Also read: It’s raining money! A deluge of retail investors hits the primary market
