The IPOs or Initial Public Offerings of the country are taking a great pace in the market today, and many are wondering where this market has travelled. Let’s look at the Indian IPO market in detail – let us see how it has grown to what it is going to take shape as in this post.
What is the Meaning of IPO?
An Initial Public Offering occurs when a new or existing firm with no shares listed on the stock exchange decides to invite the public to purchase its shares (IPO). The proceeds from the sale of those shares are then used to purchase new machinery or land or to settle the company’s debts/loans. Individuals that invest in the firm by purchasing its shares are rewarded (in the form of dividends) by the company, or the shares are sold when the share price is favourable for trading.
Brokers can help you purchase shares in a firm that is already publicly traded. This is known as purchasing equities on the secondary market. Buying from the primary market involves purchasing shares directly from the company when it makes its initial public offering (IPO) in India. This is more profitable than buying on the secondary market since corporations issue their shares at a discount and then list them at a premium. And selling them can net you money.
Before you get going for a Live IPO subscription, you can know more about it in this article, the past, the future and what’s exactly happening right now.
Looking Back at the IPO Blast of India
This signals the beginning of a brand new chapter in India’s basic market, which has had a tumultuous past since multinationals were forced to give shares to the public under a new rule in the late 1970s, and Reliance Industries gave it life for the first time. Since then, four significant events have changed the primary capital markets. Each has broadened the pool of firms, expanded the investment community, or acted as a model for regulation modifications.
What is Happening in the Indian IPO Market?
The Indian IPO market is littered with examples of IPO craze that has gone too far, resulting in losses for IPO investors. There was an IPO boom in 1992, which crumbled when the BR fraud was exposed. Then there was the enormous IPO boom of 1994-1995, which ended abruptly with the MSGM IPO and its disastrous listing.
Third, in 1999, there was a mini-IPO bubble when software and telecom stocks with shaky business models began to raise IPOs at high premiums. That, too, crumbled in 2000 as the technology story unravelled around the world. Then there was the massive IPO boom in 2006-2008, which ended with the subprime mortgage catastrophe.
It is difficult to say whether there is an IPO boom, but there has undoubtedly been an increase in IPO activity. In the fiscal year 2016-17, IPOs raised a total of $2 billion. Furthermore, the Indian IPO market is expected to see close to $5 billion in IPOs in the current fiscal year 2017-18.
However, a simple examination of the current IPO landscape reveals that the Indian market is still far from an IPO mania.
What Does the Future Hold for IPOs?
Despite the Covid19 pandemic, more than 20 firms went public in 2020, raising more than Rs.30,000 crores from investors across India.
Though the total amount of capital raised was not a new record, the IPOs saw record-breaking investor subscriptions. The average listing gain by investing in IPOs was over 35% which was the best in a decade.
If there is a chance, and if there is a chance, then there is a chance.
Along with that, there are several highly popular companies in which investors are interested in investing.
The LIC IPO is estimated to value the firm at more than Rs.13 lakh crores, making it one of India’s most valuable corporations.
Other notable 2021 IPO prospects include the National Stock Exchange (NSE), Kalyan Jewellers, Zomato, and Nazara Technologies.
Some Things About IPOs are Just Myths
- Investing in an IPO allows you to get in on the ground floor: Other parties have already invested in a firm by the time you invest in it.
- If everyone in India is enthused about an IPO, it must be a wonderful investment.
- If a company goes public, it must be financially strong: Many companies file for an IPO when they should not.
So, keep the aforementioned suggestions and myths in your mind before you start applying for an IPO in India, and you will profit in the long run.
If you are looking at opportunities surrounding investments in IPOs, then you might want to know that investments in IPOs are not based on the evolving market but are based on your financial goals. But, if you want to have a look at this ever-growing market – this post is perfect for you to make informed decisions.