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IPO Rush: Primary market comes to life with benchmarks trading near record highs

IPO Rush: Primary market comes to life with benchmarks trading near record highs

IPO Rush: Primary market comes to life with benchmarks trading near record highs
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By Reema Tendulkar  Nov 11, 2022 4:00:48 PM IST (Updated)

The first 11 months have seen 31 IPOs so far with companies managing to raise Rs 54,251 crore.

After a five-month lull, India's primary market is again buzzing with activity as the benchmark indices, both S&P BSE Sensex and the NSE Nifty 50 are trading near their respective record high.

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The month of November has already seen eight companies attempting to sell their shares to investors, raising nearly Rs 10,000 crore, according to data from Prime Database.
Four companies came out with their IPOs last week, of which DCX Systems listed at a 40 percent premium to its issue price of Rs 207. The other three companies - Fusion Micro Finance, Bikaji Foods and Global Health will be making their debut on Dalal Street soon.
The IPOs of four other companies - Archean Chemicals Industries, Five Star Business Finance, Kaynes Technology, and Inox Green Energy Services are currently open for subscription.
The calendar year 2022 has been otherwise quiet for IPOs after a record-breaking 2021. The first 11 months have seen only 31 IPOs so far with companies managing to raise Rs 54,251 crore. The funds raised were also less than half of the Rs 1.18 lakh crore that companies managed to raise last year.
A point to note here is that 65 percent of the IPO money raised so far in November was through Offer for Sale (OFS), an option that allows promoters or existing investors to exit. Proceeds from the OFS component of the IPO do not go to the company.
The IPO of Bikaji Foods and Five Star Business Finance were purely Offer For Sale. 77 percent of the Global Health (Medanta) IPO was also an OFS.
Companies coming out with IPOs are also looking to raise funds to reduce debt. 40 percent of the funds raised through fresh issue of equity will be utilised for debt reduction.
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