“Companies are choosing to take a more tactical approach on whether to move forward or lag behind,” according to Bhush Shah, managing director and head – investment banking, Aquiros Capital. “Investor sentiment broadcasters are over-balanced on launch windows and pricing.”
Currently, 141 companies have regulatory approvals — valid for one year from the date of clearance — to collectively raise about ₹ 1.64 lakh crore through IPOs, according to data from the Prime database. At least 80 companies still have an approval window of 3-9 months to launch their issues, but bankers are worried about investors’ appetite for new shares if secondary markets remain stagnant.
Institutions “Global geopolitical tensions and trade deal restructuring are creating a risk-averse environment among global institutional investors anchoring India’s large IPO books,” said Ganesh Jagdeeshen, CEO of Plutos Global – a cross-border M&A and capital raising advisory firm. “Some companies will likely hold off on their IPO launches if the approval is valid for a short period of time.”
The approvals of five companies – Continuum Green Energy Ltd, GSP Crop Science Ltd, Jaju Rashmi Refractories Ltd, Ajay Poly Ltd and Veritas Finance Ltd – are due to expire in the next two months, according to Prime database data.
Rising tensions, a sharp rise in crude oil prices and fresh selling by foreign investors have led to a sell-off in the market over the past week. Sensex fell by around 3% during this period.
“The primary market always takes cues from the secondary market. The ongoing volatility in the secondary market is the main reason for fewer IPO launches.” Pranav Haldia, Managing Director of Prime Database said.
