It is raining initial public offerings (IPOs) non-stop. The Dalal Street listing frenzy is unprecedented even compared to the periods of excesses in the past and July promises to be the best month ever in this regard.
July IPOs will also dwarf what companies raised in the six months between January and June this year with Rs 24,000 crore worth IPOs ready to hit the street.
Companies range from a wide array of sectors. Zomato, Chemplast Sanmar, Vijaya Diagnostic, Glenmark Life, Clean Science, Utkarsh SFB, Krsnaa Diagnostic, Medi Assist, Shriram Properties, GR Infra, Rolex Ringhs, Windlas Biotech, Seven Islands Shipping, Tatva Chintan are few of the names.
This list is based on media reports, banker conversations and people in the know.
One thing that one keeps hearing is that primary markets will suck out liquidity from secondary markets and markets tend to underperform after big IPO months. Is this true?
If one looks at returns for the Nifty post big IPO months over 4-5-6 months maximum - basically did the market go sideways, down or actually up in the near term? The evidence is neither here nor there.
In three out of the five instances, the market went up. Although only in one was the upmove significant. In the other two, the market went up 3 odd percent each.
One fall saw the market slip nearly 12 percent over a 5 month period.
This does not account for specific events, which may have skewed market action either up or down and other such nuance.
However, there is no doubt that after the best January to June period in 2021 where over Rs 27,000 crore has already been raised, July 2021 promises to nearly equal the fundraise of the last six months.
Watch the accompanying video of CNBC-TV18’s Prashant Nair to know what markets do post very large IPO periods.