New Delhi, Aug 26 Market activity in August remained strong, with 13 mainboard initial public offerings (IPO) raising Rs 15,200 crore and 28 SME IPOs raising Rs 1,345 crore -- the highest SME fundraise since September 2024.
However, most of the listing gains have been modest, indicating a cautious sentiment. Even as interest in new issuances remains, investor expectations are tempered due to global challenges and a slowdown in the domestic market, according to market experts.
Indian IPOs raised Rs 16,124 crore in July and Rs 17,688 crore in June. The highest fundraising from the SME space came from 28 companies that tapped the market. The level of funding is, however, down from Rs 1,205 crore in July and Rs 1,300 crore in June.
Analysts attributed the rise in IPO activity to higher allocations from foreign and domestic investors who sought opportunities in the primary market due to stretched valuations in the secondary market. New issuances provided an appealing entry point into fundamentally strong businesses for many investors. Most issues were priced at a premium, resulting in limited gains on listing day.
"Despite sluggish earnings growth and headwinds like high tariffs, the market continues to be resilient. A resilient market coexisting with tepid earnings growth has made the Indian market the most expensive in the world. Consequently, FIIs have been sustained sellers, but massive DII buying totally eclipsing FII selling is supporting the market even amidst strong headwinds," said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
Only a handful of unique businesses, such as NSDL, Anthem Biosciences and Aditya Infotech, with clear growth potential and competitive moats, have been able to sustain follow-up buying after their market listing.
Among mainboard offerings, Knowledge Realty Trust was the largest IPO in August, raising over Rs 4,200 crore, followed by JSW Cement, which raised around Rs 3,600 crore, and Vikram Solar, which raised around Rs 2,080 crore.
The interest in primary issuances increased as secondary market activity remained subdued in August due to global uncertainty. The US's tariffs on trading partners have created uncertainty for global trade and economic stability.
Analysts feel that the listing gains will improve with stronger participation in the secondary market, once the geopolitical tensions ease.
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