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The bearish market sentiment engulfing the Indian stock market in the past over one month has hit the IPO market significantly, as the current public issues are witnessing subdued subscription numbers.
Recent IPO listings like Afcon Infrastructure and Godavari Biorefineries also gave sharp negative returns to the investors.
The bearish market sentiment engulfing the Indian stock market in the past over one month has hit the IPO market significantly, as the current issues are witnessing subdued subscription numbers. Recent listings like Afcon Infrastructure and Godavari Biorefineries also gave sharp negative returns to the investors.
Currently, four mainboard IPOs are opened but none of the issue has been even fully subscribed. The Swiggy IPO, which is closing today, has so far received just 24 per cent subscription till 12:57 pm.
The ACME Solar Holdings IPO and the Sagility India IPO are closing tomorrow, Friday. While Sagility has just been hardly fully subscribed with 1.02 times subscribtion, ACME has got only 58 per cent subscription so far.
Interestingly, retail investors remain hopeful of the primary markets as both ACME and Sagility IPOs have been fully subscribed in the retail category. The Swiggy IPO has also received 75 per cent subscription in the retail quota, which is more than any other quota subscription (NII or QIB) except employees portion that has received full subscription.
The Niva Bupa Health Insurance IPO, which opened today, Thursday, also received a muted 9 per cent subscription in the first half of the first day of bidding. In this issue also, retail has already subscribed 47 per cent of their quota.
“Now, the primary market (IPO market) is taking the hit significantly even as the overall secondary market (stock market) sentiment remains bearish amid FPI outflows from Indian equities. This is opposed to the recent times when any IPO received overwhelming subscription and blockbuster listing,” said a stock market analyst.
The Indian markets have corrected sharply since September 26, 2024, when they hit their record highs. The NSE Nifty, which touched its peak of 26,277.35 on September 26, has now declined by 7.9 per cent to nearly 24,000.
The BSE Sensex has also fallen by 7.4 per cent to about 79,585, compared with its peak of 85,978.25 at the end of September.
Subdued IPO Listings
Amid the weakened market sentiment, most recent initial public offerings (IPOs) have given negative returns.
India’s largest Hyundai Motor India IPO, which was listed last month on exchanges, saw a 1.33 per cent listing loss for investors. Following that, Deepak Builders & Engineers also witnessed a 1.48 per cent erosion in investors’ wealth on the listing day.
Other IPOs also proved wealth destroyers with the worst being Godavari Biorefineries and Afcons Infrastructure that were listed at a discount of 12.5 per cent and 7.99 per cent, respectively.
However, only Waaree Energies IPO was a blockbuster listing during the period, which posted a huge 66.3 per cent gains on its listing day on October 28.
“Retail investors need to be cautious while applying for the IPO as the market texture is not favourable. Consulting a financial advisor is a must,” the analyst said.
