The Indian primary market (IPO market) witnessed huge volatility in the financial year ended March 31, 2022. This year 53 companies have raised Rs 1.18 lakh crore through IPO from the primary market. Market experts say that this sequence will continue in the financial year 2023 as well. In FY 2022, companies have raised 3.7 times more money from the primary market than in FY21.
Let us inform that in the financial year 2020-21, 30 companies had raised Rs 31,268 crore through their IPO. Data from the primary market shows that the previous financial year 2018 proved to be the best year from the point of view of IPO with all the companies raising Rs 81,500 crore from the IPO market.
In the financial year 2021-22, many new age internet based digital companies have demolished all the made-up assumptions of the market. This year IPOs of Paytm, Nykaa, Policy Bazaar and Zomato entered the market. These IPOs became the center of attraction for investors, defying the traditional norms of valuation. Especially new retail investors have bought them heavily despite their high valuations.
Of these, except Paytm, almost all new age tech companies were listed in the market at a huge premium. In the year 2021, they saw a good rise, but as soon as 2022 started, the secondary market became very volatile and due to the possibility of a hike in interest rates in the US, these stocks got a huge setback and these stocks saw a lot of decline.
Sneha Poddar of Motilal Oswal Financial Services says that despite the slowdown in the fourth quarter, we expect the primary market to see strong growth in FY 2023 as well. Investors’ sentiments have improved due to a good recovery in the economy, easing tensions between Russia and Ukraine and the return of FII buying in the market. Sneha Poddar further said that good listing of all IPOs in FY 2022 has strengthened investor confidence.
Let us inform that the market regulator SEBI has so far approved 56 companies for their IPO. These companies want to raise Rs 1.4 lakh crore in the financial year 2023 through their IPO. The biggest IPO in the history of the Indian primary market can come in the financial year 2023 itself. This IPO will be LIC’s IPO, whose size can be around Rs 65,000-70,000 crore. Through this IPO, the government will sell its 5 percent stake in the company. This IPO can come in the market in May, under which 31.60 crore shares of the company will be sold.
While 56 companies have got approval for IPO from SEBI so far, 41 more companies have applied for their IPO with SEBI. These 41 companies want to raise Rs 81,000 crore from the IPO market.
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Sneha Poddar says that apart from LIC, many other new age companies may approach the IPO market in the coming months, including Oyo, Ola, Pharmeasy, Delhi, Byjus, MobiKwik, Snapdeal, FLipkart, Swiggy and Ixigo. . Due to which the amount to be raised from the IPO market in FY 2023 may be more than that of FY 2022.