<div><em>What the market currently requires is a few success stories (great post-listing returns) to prompt people to look at the IPO market seriously, says <strong>Paramita Chatterjee</strong></em></div><div> </div><div>Investors and policymakers can breathe a sigh of relief. Well, at least for now! The primary market which was subdued at the start of 2015 is suddenly bustling with activity with three companies filing for draft papers with the Securities & Exchange Board of India (Sebi) this week itself. This is despite the current volatility in the Indian bourses owing to the Greek worries. </div><div> </div><div>InterGlobe Enterprises, which owns the country's biggest airline IndiGo, plans to raise about Rs 1,250 crore, while staffing firm TeamLease and E-retailer Infibeam are in queue to raise about Rs 450 and Rs 500 crore, respectively. That is not all. Other companies that have joined the IPO bandwagon and have filed their offer documents in the past few days with the market regulator include coffee chain Cafe Coffee Day, international SIM card provider Matrix Cellular and RBL Bank, formerly known as Ratnakar Bank.</div><div> </div><div>This sudden flurry of activity in the IPO space is definitely good news for the industry, especially since the IPO market has been sluggish for the past 3 years. In the first two months of the current fiscal, as many as four IPOs were launched with companies raising Rs 1,880 crore, as per data available with Prime Database, the country's first database dedicated to the capital markets. These are by transport firm VRL Logistics, UFO Moviez India, a digital cinema distribution network and in-cinema advertising platform, the Agra-based PNC Infratech and toll management company MEP Infrastructure Developers. </div><div> </div><div>In the previous fiscal, the total number of IPOs stood at 8 with companies raising a meagre Rs 2,770 crore. “In the year gone by, expectations were very high, given the hope generated by the new government and a buoyant secondary market. However, the year did not see too many IPOs,” said Prithvi Haldea, Chairman at Prime Database. The reasons behind were manifold. For one, the revised SEBI’s eligibility norms had limited many potential issuers. Two, greater disclosures and higher due diligence by the investment bankers was taking much longer time. Companies which are now looking to tap the market have actually been planning for long. </div><div> </div><div>Going forward in the current fiscal, India is likely to see quite a quite a few IPOs if the market and the sentiments continue to be bullish. Also, with Sebi announcing an alternative institutional trading platform for start ups to list with ease, many more promoters may be willing to tap the capital market. But what will determine the fate of the IPOs – whether the big ones or start ups -- is the pricing. Besides, the corporate sector has to start reporting better numbers and until that happens, the stories would be weak and hence valuations would be low. </div><div> </div><div>Also, what the market currently requires is a few success stories (great post-listing returns) that will automatically prompt people to look at the IPO market seriously. Investors continue to believe that there is still an upside available in the secondary market, where risks are comparatively lower and therefore are putting their money there directly or through the mutual funds. </div><div> </div><div> </div><div> </div>
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