The big, fat IPO party may spill over to next year

New Delhi: Initial share sales are set to dazzle the Dalal Street in 2022 too as companies are expected to garner up to Rs 1.5 lakh crore in the New Year, continuing with the bullish momentum after 2021 turned out to be the best IPO year in two decades for the Indian market.

Excessive liquidity and increased retail investor participation ensured a persistent euphoria in the Initial Public Offer (IPO) space wherein companies mopped up more than Rs 1.2 lakh crore this year even as pandemic gloom shadowed the broader economy. In 2022, the higher amount of funds through the primary market will be largely driven by the mega IPO of state-owned Life Insurance Corp (LIC). Besides, a lot of new-age digital players are expected to explore initial share sales.

All said, the possible impact of the coronavirus pandemic, especially with the emergence of Omicron, might still be a cause for concern.

Venkatraghavan S, Managing Director and Head - Equity Capital Markets at Equirus, said that with interest rates set to move up, there might be some dampening of the current frenzy. “But, we don’t expect a wholesale collapse of the primary market for equities. Any pandemicrelated alarms could of course throw a spanner in the works.”

For calendar year 2022, he said that since LIC listing is also expected, it is anticipated that the amount raised through IPOs will be in the range of Rs 1.25 to 1.5 lakh crore.

On the flip side, there are voices who feel that 2022 might not be as buoyant as this year and there are also concerns about the pandemic situation.

A lot will depend on market sentiments next year as the uncertainty due to the new COVID variant still looms large on the markets and economy, Piyush Nagda, Head-Investment Product at Prabhudas Lilladher, said.

Ricky Kirpalani, Lead Sponsor at First Water Capital Fund (AIF), said that 2022 may not be as buoyant as 2021 for IPO markets, given how some recent large public issue like Paytm have performed post-listing.

Prateek Singh, Founder and CEO of LearnApp.com, said tech companies now want to expand globally for which they require capital and that capital is being raised through the IPO route.

The year witnessed spectacular response from retail investors and the average number of applications from retail was 14.36 lakh, in comparison to 12.77 lakh in 2020 and 4.05 lakh in 2019.

Going into 2022, Eklavya, founder of trading platform Recur Club, said that as long as central bankers maintain an accommodative stance, public equity markets valuation will remain firm which will provide confidence to the IPO market. -(PTI)