Discover how companies are defying market turbulence to go public.
In the midst of October’s turbulent market volatility, companies remain resolute in pursuing their IPO ambitions. Despite facing challenges, their commitment to going public around Diwali remains unwavering.
The preceding months leading up to October 2023 were marked by a remarkable 30% surge in mid and small-cap indices, a positive trend that offered hope. However, the latter half of October introduced a different narrative as rising US bond yields, ongoing divestment by foreign investors, and resurging geopolitical tensions injected uncertainty and apprehension into the stock markets.
Nonetheless, nearly a dozen companies are preparing to make their market debut during the Diwali season, undeterred by the recent market fluctuations. In this article, we delve into the underlying factors driving these companies’ determination to proceed with their IPO plans.
Notable companies, including Flair Writing Industries, Cello World, Esaf Small Finance Bank, and Protean eGov Technologies, are set to undergo public listings before the onset of Diwali. Moreover, companies like Tata Technologies, Federal Bank Financial Services, Jana Small Finance Bank, DOMS Industries, Western Carriers, and Park Hotels are poised to unveil their IPOs in the coming months, likely in November or December 2023.
According to reports from Mint, these companies collectively aim to raise approximately Rs 6,000 crores in IPO proceeds. All of this activity unfolds amidst the recent decline in the markets, with the Indian benchmark indices, Nifty 50 and Sensex, experiencing a six-day consecutive slide.
Companies that are slated to go ahead with their IPO plans despite market volatility
Insights from Investment Bankers
Honasa Consumer, the parent company behind the renowned brand ‘Mamaearth’, recently initiated its IPO subscription period from October 31st to November 2nd, 2023, with a target of raising Rs 1,701 crore.
According to Livemint, when asked about the impact of the recent market corrections on Mamaearth’s IPO, Jayasankar Venkataraman, Managing Director at Kotak Mahindra Capital, shared, “We have taken into account market conditions while pricing the issue. We have launched the transaction keeping in mind the market volatility and feedback from several investors. We believe the quality of anchor investors will be a reflection of their faith in Honasa’s vision to scale their digital-first Omni channel portfolio of BPC (Beauty & Personal Care) brands”.
The looming question is whether these IPOs will enjoy successful subscription rates and deliver favourable returns to investors upon their market debut.
The answer may be nuanced. IPOs with robust institutional demand may attract sufficient subscriptions, but the recent market turbulence could impact post-listing returns. This was evident in the case of certain new-age companies like Nykaa and Policybazaar, which launched their IPOs at the market’s peak in November 2021, only to witness a significant drop in their stock prices during a market correction.
While it’s undeniable that fundamentally strong companies tend to pique investor interest, the outcome remains uncertain, and time will reveal the true story.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.