IPOs come out of deep freezer as market revives, liquidity eases

More cos could join Burger King, Antony Waste in giving listing another shot

Several firms that had filed their offer documents last year but given up on their listing plans due to disruptions caused by the pandemic are getting a new lease of life.

The success of recent initial public offerings (IPOs) and the stability in the secondary market are propelling many firms and investment bankers to remove their IPO plans out of the deep freezer.

Burger King India has revised its offer document filed last year, and has filed draft papers with Sebi to raise Rs 542 crore through fresh issuance of shares. Antony Waste Handling, which had withdrawn its IPO in March amid the sell-off, has re-filed its IPO. 

Further, Equitas SFB halved its IPO size to be able to come to the market. The Chennai-based firm had filed its offer document in December and was looking to hit the market by March. More such entities are looking to follow suit. 

I-bankers say supportive markets, coupled with regulatory dispensation, have triggered this move.

“Things are looking better and the economy is opening up. Investors are hopeful that once the pandemic-related problems settle down, companies that are sector leaders will continue to do well. The Securities and Exchange Board of India (Sebi) has made changes, which is making it easier to access the markets. I expect more entities to come up with IPOs in the days ahead,” said Chirag Negandhi, co-CEO of Axis Capital.

Industry players say the good showing by most of the recent IPOs has boosted sentiment. Benign liquidity conditions will also help garner institutional investor support.

In the past two months, eight IPOs have hit the market. Of these, six have seen robust subscription and good listing. 

“The markets are receptive to good-quality IPOs. The performance of recent IPOs, barring some exceptions, has been decent. Some issues lined up are unique stories with good management, and there could be a lot of investor interest. There is a lot of money waiting to be deployed and lot of institutional investor interest. Even retail investors are aggressive now,” said Pranjal Srivastava, an independent equity markets professional. 

Besides existing companies reviving their IPO plans, newer ones are readying their offer documents. At least six companies, including Kalyan Jewellers, Mrs Bector Food, and Suryoday Small Finance Bank, have filed their offer documents in recent months.

Sandip Khetan, IPO leader at EY India, said October-March would be good for IPOs.

“The second half looks significantly better. IPOs might continue to allure investors in the primary market after successful subscriptions in recent times.”