The primary market is set to kickstart the new year with a relatively quiet week in the mainboard segment. No new IPO launches or listings are scheduled for the week starting January 1, 2024. However, the action continues in the SME (Small and Medium Enterprises) section, with six listings lined up. Let’s take a closer look at the upcoming IPOs and the trends observed in the primary market.
SME Segment: A Hotbed of Activity
The first listing of the week is Sameera Agro and Infra, an infrastructure development and construction company, which is set to debut on the NSE Emerge on January 1. This public issue, amounting to Rs 62.64 crore, witnessed a healthy subscription of 2.8 times during the period of December 21-27.
The following day, on January 2, AIK Pipes and Polymers will be listed on the BSE SME. With a public issue worth Rs 15 crore, AIK Pipes and Polymers received an overwhelming response, with the subscription crossing 40 times during December 26-28.
On January 3, four more listings are scheduled, including Akanksha Power and Infrastructure and HRH Next Services on the NSE Emerge. Manoj Ceramic and Shri Balaji Valve Components will debut on the BSE SME. These companies witnessed significant investor interest, with Akanksha Power and Infrastructure’s offer subscribing more than 115 times, and HRH Next Services’ issue booking over 65 times. Manoj Ceramic’s IPO was subscribed around 9 times, while Shri Balaji Valve Components saw a robust response, with a subscription rate of over 270 times.
Kay Cee Energy & Infra, a company specializing in the construction and commissioning of electricity transmission and distribution systems, will be the final listing of the week on January 5. Their initial public offering, valued at Rs 16 crore, has already garnered substantial interest from investors, with a subscription rate of 146 times so far.
Record-Breaking Year for SME IPOs
The year 2023 witnessed a remarkable surge in IPO activity in the SME segment. A total of 182 companies launched their maiden public issues, raising a record-breaking Rs 4,967 crore. This amount represents the highest ever capital raised by SMEs through IPOs in a single year. Furthermore, the number of IPOs launched in 2023 exceeded the figures from previous years.
In comparison, the year 2022 saw 109 companies mobilize Rs 1,980 crore through public issues, marking a significant increase in both the number of IPOs and the capital raised.
Outperformance in the SME Segment
The BSE Small and Medium Enterprises IPO index experienced an impressive rally of 96 percent throughout 2023, outperforming the BSE IPO index in the mainboard segment, which recorded gains of 41 percent.
This outperformance can be attributed to the significant listing gains and successful debuts of many SME companies. The IPO market witnessed a surge in buzz, driven by positive secondary market sentiment and a growing interest in SME stocks.
Positive Outlook for the Primary Market
Experts are optimistic about the primary market’s prospects in the coming year. Devang Mehta, Director – Equity Advisory at Spark Capital Private Wealth Management, highlighted the remarkable debut and substantial listing gains observed in the IPO market. He emphasized that the market has seen the most significant amount of fresh capital being raised in the past eight years, with 42 percent of the money raised being fresh capital rather than offer-for-sale (OFS) transactions.
Mehta also mentioned that the absence of very large IPOs, which could potentially drain liquidity and create a euphoric scenario, has contributed to the market’s stability. He expects this trend to continue in 2024, with IPOs continuing to garner significant oversubscription, driven by a positive secondary market sentiment.
Users Today : 5
Users Yesterday : 8