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IPO Rush: Quality, pricing hold the key in 2022

Infact this segment new age digital firms raised the highest fresh capital in 2021 with companies like Paytm raising Rs 18,300 cr and Zomato raising Rs 9,375 cr

New regulations hit China in global tech, media & telecom IPO market
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New regulations hit China in global tech, media & telecom IPO market

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Mumbai: India's primary market is set to see a healthy but cautious response from investors in 2022, analysts said. Accordingly, a number of IPOs are expected to hit the market. These might include the ones from LIC and NSE. However, experts voice concerns over the pricing issue for IPO market. Investors need to be choosy and selective on quality stocks.

Further, new age companies are likely to come up with IPOs in 2022 including Pharmeasy, Delhivery, MobiKwik and Ixigo. This year, a total of 63 companies raised Rs 1.19 lakh crore through IPOs, making it the highest ever fundraise in a particular year.

In 2017, firms raised Rs 67,147 crore through 36 IPOs. "The humongous liquidity flows and good listing by many IPOs instilled confidence in investors for IPOs. The momentum is likely to continue as a lot many IPOs are still lined up for next year. It includes one of the biggest IPOs in India that of LIC, followed by NSE, expected to come by early next year," said Sneha Podar, AVP Research, Broking & Distribution, MOFSL.

"Many more new age companies are likely to come up with IPOs in the coming months including Oyo, Pharmeasy, Delhivery, MobiKwik and Ixigo." Notably, this year saw several new-age digital players getting listed Paytm, Nykaa, Policy Bazaar, Zomato amongst others. Infact this segment new age digital firms raised the highest fresh capital in 2021 with companies like Paytm raising Rs 18,300 crore and Zomato raising Rs 9,375 crore.

Besides, Paytm has been the biggest IPO ever, surpassing Coal India which had raised Rs 15,200 crore in 2010. "IPO market will be supported by the government's divestment plan, startups and new growth in the economy. However, the ongoing consolidation and recent weak listing will have the effect in the short-term," said Vinod Nair, Head of Research at Geojit Financial Services.

"Moderation in secondary market trends and drop in world liquidity will have an effect on 2022 too. Going ahead investors are expected to be choosy in terms of quality and pricing of IPO offerings."

According to Sunil Nyati, Managing Director of Swastika Investmart: "There are lots of big names like LIC, NSE, Bajaj Energy, Ola, Delhivery, Go Air, etc., that are likely to come out with their IPOs next year."

"It is difficult to say the exact amount that will be raised through all IPOs next year but it will be much bigger than last year because LIC's IPO itself should be worth more than Rs 70, 000 crore. Lately, caution has set in with regards to IPO pricing. Particularly, the first-time investors have become more cautious before participating in the offering process."

Rohit Vaid
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