The Indian stock market witnessed a record bull run this year with the benchmark indices hitting fresh all-time highs throughout the year till October when it peaked. Thereafter, it witnessed some pullback from the higher levels more so after the discovery of the new Omicron Covid-19 variant in November.
So far, the market has corrected over 8 per cent from its all-time highs hit on October 19, with the Sensex falling 8.54 per cent from its record highs to 56,930.56 as of Wednesday’s close and the Nifty crashing 8.86 per cent to 16,955.45.
However, when it comes to initial public offerings (IPOs), the market sentiment has been positive throughout. The primary market has been buzzing with a record number of IPOs this year with as many as 62 companies getting listed so far in the calendar year 2021. These companies have cumulatively raised over Rs 1.18 lakh crore. It has also been a clinical year as we have witnessed some of the key new-age businesses which have raised capital through the IPO route.
Even though the secondary market has come under correction during the past couple of months following the concerns over the Omicron variant, the string of IPOs continues to flow in.
Speaking about the progress in the market, Ravi Singh, vice president and head of research at Share India Securities, told indianexpress.com that the equity markets had a historical move with benchmark indices touching new lifetime highs of 18,000 and 60,000 mark for the first time ever owing to improved macro parameters, higher liquidity and strong recovery in corporate earnings. He added that due to this positive sentiment seen on the benchmark indices, a majority of IPOs performed very well and turned to multi-baggers.
Heading into 2022, however, Singh remains cautious about the concerns surrounding the development of Omicron and rising inflation in the global market.
“Given the prospect of further rise in inflation, there are chances that most of the central banks may raise interest rates to curb the liquidity. The growing uncertainty and fear over Omicron would drive the market momentum next year. Global economies are already facing high inflation and economic bottlenecks and still in revival mode post Covid outbreak,” he said adding that in this scenario if new lockdowns and restrictions are imposed then it would be very difficult to maintain the pace of recovery.
“The year 2021 has been great in terms of generating returns from investments in stock market but year 2022 seems to be more challenging,” Singh opined.
Speaking on IPOs, Narendra Solanki, Head-Equity Research (Fundamental) at Anand Rathi Shares & Stock Brokers told that the IPO market in 2021 was very robust and vibrant and on an average, we have seen more than five new issues hitting every month.
“For the next year 2022, the primary market should continue to remain active and vibrant with a lot of new issues lined up especially from new-age tech and fintech spaces. Few of the probable are LIC, More Retail, Mobikwik, Ola, Delhivery, Byjus etc.” he said.
Here is a look at the top IPOs that created a buzz in the market in 2021:
The IPO of the online food delivery platform Zomato was one of the most sought after amongst the new-age businesses that got listed this year. The company raised Rs 9,375 crore through the public issue and it was met with a huge demand from the market participants as well, getting subscribed 38.25 times.
The shares of Zomato made a stellar debut on bourses and zoomed nearly 53 per cent against the issue price on the opening day, which saw its market valuation cross the Rs 1-lakh-crore mark.
The scrip continues to trade above its issue price and as of Wednesday’s close, it is 82.24 per cent higher at Rs 138.50 on the BSE.
FSN E-Commerce Ventures, which operates the online beauty e-commerce platform Nykaa, was another such new age business which created a buzz amongst investors upon its arrival. Lead by Falguni Nayar – a former investment banker turned entrepreneur, the company raised 5,352 crore through its IPO and the issue got subscribed 81.78 times.
On the day of listing, the Nykaa scrip made a strong debut and got listed at a premium of over 79 per cent above their issue price in the stock exchanges.
Nykaa too continues to trade above its issue price and as of Wednesday’s close, it is 78.88 per cent higher at Rs 2012.40 on the BSE.
3. PB Fintech
PB Fintech, the operator of online insurance aggregator Policybazaar and credit comparison portal Paisabazaar, too was a much sought after IPO when it arrived in the primary market.
The company raised Rs 5,710 crore through a fresh issue of equity shares worth Rs 3,750 crore and an offer for sale (OFS) of Rs 1,960 crore by existing shareholders. It was met a positive response and the issue got subscribed 16.59 times.
The shares made a firm debut and got listed at a premium of 17.35 per cent above their issue price last month. However, after the initial weeks of post listing rally, the stock has slowly given up its gains.
At present, the stock is hovering near its issue price. As of Wednesday’s close, it is 0.05 per cent higher at Rs 980.50 on the BSE.
One the most famous platforms in the payments space of the country, One 97 Communications, the parent entity of digital payments firm Paytm, was already the talk of the town when it initially filed its draft papers with market regulator Sebi.
Not only was it the most awaited IPO amongst the new businesses, but it also became the largest IPO in the country by raising a whopping Rs 18,300 crore. However, given the huge size of the offer, the response was comparative muted by the investors. The IPO managed to get fully subscribed by the third day and eventually was subscribed 1.89 times.
But the journey for Paytm in the stock market was disastrous as on the day of listing it crashed over 27 per cent from the issue price on the first day.
Since the past one month of listing it has continued to trade below its issue price and presently, as of Wednesday’s close, it is 37.53 per cent lower at Rs 1343.05 on the BSE.
5. MTAR Technologies
MTAR Technologies, a Hyderabad-based precision engineering solutions company, was a favorite amongst the investors. The company has capabilities to build nuclear and pressurized water reactors, aerospace engines, missile systems, aircraft components and many such other critical components and assemblies.
MTAR Tech raised Rs 597 crore through its IPO and the issue got subscribed 200.79 times.
On the day of listing, the MTAR Tech stock got listed at a premium of over 85 per cent above their issue price in the stock exchanges.
MTAR Tech has continued to trade above its issue price since its listing in March this year and as of Wednesday’s close, it is 299.40 per cent higher at Rs 2,296.55 on the BSE.
6. Paras Defence and Space Technologies
Paras Defence and Space Technologies was one of the smaller sized IPOs this year. The company is engaged in designing, developing, manufacturing and testing a wide range of defence and space engineering products and solutions.
Paras Defence raised Rs 171 crore through the primary market and received a huge interest from the investors. The issue got subscribed a whopping 304.26 times.
On the day of listing, Paras Defence stock made a blockbuster debut and got listed at a premium of over 171 per cent above their issue price in the stock exchanges.
It has continued to trade above its issue price since its listing in October this year and as of Wednesday’s close, it is 302.69 per cent higher at Rs 704.70 on the BSE.