Given the current market scenario which continues to remain bullish, IPOs of stocks including SME stocks continue to remain majorly overpriced,” said Ramachandran.
In the first month of 2024, IPOs of 23 companies opened up for retail investors for subscription, both in the Mainboard and SME segments. The total amount raised by the companies was nearly Rs 3,500 crore. The Mainboard segment raised 5.6 times more than SME IPOs in January.
In the Mainboard segment, five companies raised around Rs 2,950 crore. Medi Assist Healthcare raised the most. The company raised around Rs 1,170 crore. Jyoti CNC Automation stands at second by raising Rs 1,000 crore. The remaining three aggregating raised nearly Rs 1,100 crore.
Meanwhile, 18 companies collectively raised Rs 522.54 crore in the SME segment. In which Baweja Studios raised – Rs 97.20 crore – the most in the category.
“Considering the data of the pipeline of DRHP filings, we are expecting the IPO activity to continue in 2024 as well. We are seeing an expansion of the markets and there is an increasing appetite for the new paper,” said Divam Sharma, founder and fund manager at Green Portfolio, PMS.
In the last year, the benchmark Nifty 50 gave a return of 22.78% on the other hand the sectoral-index Nifty smallcap 100 gave a return of 68.27%, 3 times higher, which is attracting investors. But here’s a catch, SME IPOs are of high risk. Due to this institutions cannot park large money into these small ticket offerings. “Considering the current geo-political concerns coupled with lower GDP and higher interest rates, investors, both retail and institutional should invest very cautiously as even bullish market corrections can be razor sharp. We expect this to remain a stockpicker’s market and not an overall bullish market in ’24,” said A R Ramachandran, co-owner of Tips2trades.
“Given the current market scenario which continues to remain bullish, IPOs of stocks including SME stocks continue to remain majorly overpriced,” said Ramachandran.
“We are going to continue to see a huge pipeline of SME IPOs coming to the market. The main board also is going to see some interesting businesses hitting the market. We can also see some of the startups coming for IPO as the VC/PE money is not flowing to them as it did till 2022,” said Sharma.
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Reference Link:- https://www.financialexpress.com/market/new-issues-raise-a-whopping-rs-3500-crores-in-the-first-month-of-2024-3381865/