After 5 to 6 continuous IPOs in the month of March, we are seeing no IPOs since the month of April and it’s not just a coincidence there’s a solid reason behind not coming up with IPOs.
Though many companies are filing DRHP no one is announcing final dates for the issue.
3 reasons why companies are not willing to come up with IPOs.
The covid situation in India –
Since the start of April month, India is facing a surge in covid cases and so people started talking about the market crash. India is facing around 4 lakhs + cases every day and this a lot more than 1st wave of Covid 19 infections. There is fear in the market due to the surge in cases and due to this many SME and mainline IPOs are afraid that their IPO will not get a good enough response.
So they are waiting for the right time and that right time seems to be the end of 2nd wave of Covid infections.
Nifty struggling to cross 15,000 –
For the last 2 months, nifty is playing between 14,000 and 15,000, and it’s kind of stuck there after a long bull run. We have observed that IPOs are successful only in a bull market and now it’s not. So many companies are not ready to announce dates for the issue as this might not give them full subscriptions towards IPO.
Companies waiting for startups to get listed –
There are many buzzing upcoming IPOs like LIC, Zomato, Policy Bazaar, Flipkart, and Nykaa who are planning for the IPO in 2021. The long bull run has taken sideways and the only thing that can boost the sentiments of investors in the IPO market are these big IPOs that can give big listing gains. Recently Zomato filed DRHP to raise Rs. 8250 Crores. As soon as any of these companies come up with IPO dates there might be a chance that other companies will try to get their IPO dates finalized.
Let’s see how long this company will wait to bring these offerings in public.
Why companies are not willing to come up with IPOs?
The covid situation in India and Nifty struggling to cross 15,000 is the main the reason for this as there is no bull market like before.
When will IPOs come again?
Not sure when will they come again but companies are waiting for the right time and that right time seems to be the end of 2nd wave of Covid infections.
Can we get listing gains like before?
Yes if there is bull market and if any of the big IPO gets announced we can see the listing gains coming up like before.