IPO Rush: Offerings To See Healthy Response In 2022; Pricing Key Concern

Many more new age companies are likely to come up with IPOs in the coming months, including Oyo, Pharmeasy, Delhivery, MobiKwik and Ixigo

A total of 63 companies raised Rs 1.19 lakh crore through IPOs in 2021, making it the highest ever fundraise in a particular year. Image: Getty

Mumbai: India's primary market is set to see a "healthy but cautious" response from investors in 2022, analysts said.

Accordingly, a number of initial public offerings (IPOs) are expected to hit the market. These might include the ones from LIC and NSE.  Further, new age companies are likely to come up with IPOs in 2022 including, Pharmeasy, Delhivery, MobiKwik, and Ixigo.

This year, a total of 63 companies raised Rs 1.19 lakh crore through IPOs, making it the highest ever fundraise in a particular year.

In 2017, firms raised Rs 67,147 crore through 36 IPOs. "The humongous liquidity flows and good listing by many IPOs instilled confidence in investors for IPOs. The momentum is likely to continue as a lot many IPOs are still lined up for next year. It includes one of the biggest IPOs in India — that of LIC, followed by NSE, expected to come by early next year," said Sneha Podar, AVP Research, Broking & Distribution, MOFSL.

Many more new age companies are likely to come up with IPOs in the coming months, including Oyo, Pharmeasy, Delhivery, MobiKwik and Ixigo.

Notably, this year saw several new-age digital players getting listed Paytm, Nykaa, Policy Bazaar, Zomato amongst others.

Infact this segment — new age digital firms — raised the highest fresh capital in 2021 with companies like Paytm raising Rs 18,300 crore and Zomato raising Rs 9,375 crore.

Besides, Paytm has been the biggest IPO ever, surpassing Coal India which had raised Rs 15,200 crore in 2010.

"IPO market will be supported by the government's divestment plan, startups and new growth in the economy. However, the ongoing consolidation and recent weak listing will have the effect in the short-term," said Vinod Nair, head of research at Geojit Financial Services.

"Moderation in secondary market trends and drop in world liquidity will have an effect on 2022 too. Going ahead investors are expected to be choosy in terms of quality and pricing of IPO offerings."

According to Sunil Nyati, managing director of Swastika Investmart: "There are lots of big names like LIC, NSE, Bajaj Energy, Ola, Delhivery, Go Air, etc., that are likely to come out with their IPOs next year."

"It is difficult to say the exact amount that will be raised through all IPOs next year but it will be much bigger than last year because LIC's IPO itself should be worth more than Rs 70,000 crore.

Lately, caution has set in with regards to IPO pricing. Particularly, the first-time investors have become more cautious before participating in the offering process.

"In the last two months, investors have been evaluating the valuation and business model of IPOs before investing in them, resulting in under subscription of the IPOs and listing at a discounted price," said Gaurav Garg, Head of Research, CapitalVia Global Research.

In addition, Deepak Jasani, Head of Retail Research, HDFC Securities said: "Despite the fact that LIC IPO is scheduled to hit in 2022, we think it will be difficult for the 2021 IPO collection figure to be breached in 2022, unless the IPOs are priced more reasonably and market sentiments do not deteriorate majorly."