Covid-19 impact: Exchanges see just 4 IPOs in June quarter, says report

India witnessed four initial public offerings worth $2.08 million in the three months ended June as the coronavirus pandemic impacted economic activities, according to an EY India report.

All the IPOs were in the Small and Medium Enterprises (SMEs) segment and the median deal size was $0.38 million.

Although there has not been much activity, companies are considering their long-term growth plan, and have started to engage in conversations towards their IPO preparation in this economic slowdown, leading consultancy EY India said on Sunday.

About April-June period, also the second quarter of 2020, the report said that consumer products & retail, and diversified industrial products were the active sectors in terms of the number of IPOs. Each sector had two IPOs on the SME market and they were worth around $2.08 million.

"Indian stock exchanges (BSE and NSE including SMEs) ranked seventh in the world in terms of number of IPOs in Q2 2020. There were no cross-border deals and there were no IPOs in the main markets," the report said.

Sandip Khetan, Partner and National Leader of Financial Accounting Advisory Services (FAAS) at EY India, said the experience in the last three months has been unprecedented as Covid-19 has severely impacted both, human lives and the economy.

"Similar to global markets, there has been limited to no activity in the Indian IPO market. Investors and analysts are keeping a close watch on the latest updates provided by companies about their performance as valuations become attractive for deal making.

"Companies are looking to utilise the current time toward preparing for future fund raising. We expect IPO activity to pick up during the end of 2020 or early 2021," he said.
 

Laxmi Goldorna House Ltd, Nirmitee Robotics India Ltd, Billwin Industries Ltd and DJ Mediapoint & Logistics Ltd came out with their IPOs during the June quarter, the report said.

As per the report, in the SME market, there were four IPOs versus 14 and 11 in Q2 2019 and Q1 2020, respectively.

Further, EY India said that marquee activities by Jio Platforms pushed Indian PE/VC (Private Equity/ Venture Capital) investment in May/June to more than $10 billion.