Investment bankers expect a flurry of IPOs in the second half of the financial year 2023-24, building on the trend of the last few months.

As many as 21 of the 31 IPOs in the first half of 2023-24 came in August and September, according to data compiled by Prime Database. It was followed by four IPOs in October.

At the end of September, 28 companies looking to raise Rs 38,000 crore are holding Sebi approval while another 48 companies awaiting approval from the regulator.

Investment bankers now expect a busy season over the next 4-5 months before a pause because of the general elections.

Mahavir Lunawat, chairman, Association of Investment Bankers of India, said investors consider India as a reliable and stable market even as there are global concerns because of geopolitical tensions.

In the first six months of the ongoing fiscal, foreign portfolio investors, overall
as anchors and QIBs (qualified institutional buyers), subscribed 26 per cent to the
IPO amount, more than mutual funds at 20 per cent, according to Prime Database numbers.

“Corporates are rushing to raise capital and make use of the current time. Also next year there are general elections in India. So there could be some perceived volatility in markets.
In that sense companies want to capitalise their balance sheet at the earliest and exploit the opportunities,” said Lunawat.

“This presents a huge opportunity for investment bankers as well as investors to allocate their investment in newer stocks.” .

T+3 impact

Earlier in August, capital market regulator Sebi reduced the time taken for listing of shares in public issue to three working days against the earlier requirement of six working days.

“With the timeline now halved, it gives additional leeway to investors to look at IPOs which are running parallelly. It also gives a lot of confidence to domestic and overseas investors on the kind of system we are working on,” Lunawat said.

Due diligence

He said the number of merchant bankers has grown over the past few years to 221 at present, prompting the association to launch a campaign in capacity building.

“We have a due diligence manual issued by the AIBI which is over and above Sebi norms. We will be revamping our due diligence manual and we have set up an internal committee to look into that.

“We are also looking at how to streamline the approval timeframe and have set up another committee to understand the uniform observations of Sebi,” he said.