In over two decades, the year 2021 has been a standout one for India’s capital market. In this calendar year alone, firms have generated about Rs. 1.2 lakh crores through IPOs. Enthusiastic retail investor participation and excessive liquidity are the reasons for this euphoria, even though the COVID-19 pandemic affected the broader economy.
However, this is not where it ends; this ‘firework’ is set to continue in the next calendar year as well. As per reports, 2022 may see companies raising up to Rs. 1.5 lakh crores through public issues and LIC of India will be at the forefront of it. Along with India’s premier insurance company, a host of new-age firms are waiting to go public.
A Recap of 2021
About 60-odd companies have gone public in 2021, generating around Rs. 1.2 lakh crores in due process. Since the reasons for this bullish trend are very obvious, let’s take a trip down to see what and how things unfolded this year.
- Paytm broke all previous records
Paytm or One97 Communications broke all previous records by floating an Rs. 18,500 crores IPO. But the response, however, was not as expected, as it received a subscription of 1.89 times.
- Zomato and Nykaa were the most talked about IPOs
The food delivery behemoth Zomato and Nykaa were two public issues that remained in ‘public discussion’ since they filed their DRHP. Zomato’s about Rs. 9,300 crores IPO received a subscription of 38.25 times. Whereas, the nearly Rs. 5,300 crores IPO of Nykaa was subscribed 81.78 times.
- A host of IPOs received subscriptions of more than 100 times
2021 has been a standout year in multiple senses, and one of them is a host of public issues receiving subscriptions more than 100 times. Some of the names on the list are as follows:
- Paras Defence
- Data Patterns (India) Ltd
- Tega Industries
- Latent View Analytics
- Go Fashion (India) Ltd
- Devyani International
- MTAR Technologies
- Tatva Chintan Pharma
- Rolex Rings
- Retail investors have been the real star of 2021
2021 has witnessed an astounding response from retail investors. The average number of retail investors in 2021 was 14.33 lakh, which was 12.77 lakh in 2020. Owing to such heavy demands, a lion-share of the IPOs of 2021 has opened at a premium over its issue price.
A host of public issues started trading above their issue price, extending returns of 156% to 292% after listing.
- Under the radar IPOs performed well
When Paytm, Zomato, Nykaa, and likes hog all the attention, there are public issues that have performed well without much buzz. Companies like POWERGRID Infrastructure Investment, Brookfield India Real Estate, MTAR Technologies, Latent View Analytics, and Barbeque Nation, to name a few that have brought great value to its investors.
What’s in Store for 2022?
Taking 2021 as a reference point, it is suffice to say that 2022 will hopefully be equally exciting. As many as 35 companies have already received a green light from SEBI to go public. This will raise about Rs. 50,000 crores if and when materialized. Additionally, around 30-odd companies have filed their DRHP and are targeting to mop-up about Rs. 60,000 crores.
Furthermore, LIC is the next company waiting to go public in the next calendar year. Even though the final issue size is still unknown, experts are predicting it will set a benchmark that will be hard to cross.
Along with LIC, Oyo Hotels and Homes is another notable name to launch its IPO. The company has been under severe scrutiny from regulatory bodies and investors over its practices, but things seemed to take a turn. You can expect Oyo to go public next year.
Apart from these, here are some other companies that are expected to float their public offering next year –
- Emcure Pharma (Rs. 5,000 crores)
- Adani Wilmar (Rs. 4,500 crores)
- Go Airlines (Rs. 3,600 crores)
- Gemini Edibles (Rs. 2,500 crores)
- India1 Payments (Rs. 2,000 crores)
- Paradeep Phosphates (Rs. 2,000 crores)
- Arohan Financial Services (Rs. 1,800 crores)
- Northern Arc Capital (Rs. 1,800 crores)
There is no doubt that 2022 will be another notable year for India’s capital market, with new-age tech firms as well as traditional companies set to take advantage of this market trend. However, experts do not want to discard the ‘Omicron’ factor and how RBI reacts with its monetary policy. Additionally, SEBI’s decision to bring new rule changes may play a factor in restructuring public issues.
Nonetheless, if you are planning to invest, be cautious, and learn enough about a company before putting your money on the line.
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Frequently Asked Questions
- When will the LIC IPO go live?
There is no concrete news on the IPO timeline of LIC of India.
- What has been the average issue size for 2021?
The average issue size of IPOs in 2021 was Rs.1,884 crores.
- When is SEBI planning to implement its new rules?
SEBI has not mentioned any dates on the implementation of new rules.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.