Plethora of IPOs hit the Stock Market

By Harshit Sharma

The major indices in the market were at all-time highs in the initial few trading sessions of June. Nifty touched its record high of 10,006 level. Good market conditions attracted companies to enter the capital markets in this month.

Security and Intelligence Services (India) Ltd saw a strong investor turnout for its initial public offering with the issue covered almost seven times on the final day on Wednesday, while the share sale of Cochin Shipyard Ltd was covered three times on the second day of its offering. The Rs 1,468-crore initial public offering of Cochin Shipyard ended on a strong note on Thursday, with the issue being subscribed 76.1 times. The offer received bids for 258.69 crore shares compared to 3.39 crore shares offered (excluding the portion for anchor investors). 

The vigour in the primary market is likely to continue with at least a dozen more companies to hit the market. The government’s divestment plans in various state-owned companies would be also picking pace in the second half of 2017. New India Assurance, General Insurance and IRCTC.

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval to:

(a) issue 13,90,00,000 fresh equity shares of Indian Renewable Energy Development Agency (IREDA) of Rs.10 each to the public on book-building basis through the IPO;

(b) issue shares to retail investors and IREDA employees at a discount of 5% on the issue price of each equity share on book-building basis, with cap of 0.5% on equity post issue for CPSE employees and the allocation to retail investors in the net offer will not be less than 35%, as per the ICDR, 2009.However, the number of shares proposed to be issued to employees and retail investors will be finalized in consultation with the lead managers and as per the SEBI regulations

The funds raised through initial public offers (IPO) have crossed Rs 10,000 crore in the first half of this year. The primary markets at are in a bullish mode as many IPOs are already through and many are in pipeline. Most of the newly listed companies have yielded great returns and overall optimism in the secondary markets are the drivers for record fundraising this year. The BSE IPO index has gained more than 30% this year.