Three IPOs receive bids over Rs 1.05 trillion; demand outstrips supply

The three initial public offerings (IPOs) that closed on Thursday were lapped up by investors, generating cumulative bids worth over Rs 1.05 trillion. Non-banking financial firm Northern Arc Capital and real estate developer Arkade Developers’ share sales saw over 100 times more demand than shares on offer, while logistics company Western Carriers India’s IPO was subscribed nearly 30 times.

The three IPOs capped a strong month for the primary market, which saw 10 companies mop up a cumulative Rs 10,407 crore. While this is lower than August's Rs 17,110 crore mop-up—which was the highest since May 2022—the strong momentum will boost sentiment for further issuances.

The strong demand from investors is on the back of high grey market premiums. All three will make their debut next week.

Shares of Northern Arc Capital, which has a strong presence in the MSME and micro-finance lending space, had a grey market premium (GMP) in excess of 60 per cent.

The retail portion of Maharashtra-focused Arkade’s Rs 410 crore IPO was oversubscribed 50 times, while the qualified institutional buyer (QIB) portion received over 163 times bids. The real estate firm will be utilising the proceeds for the costs to be incurred in developing ongoing projects and to fund the acquisition of yet-to-be-identified land.

Western Carriers India plans to use the IPO proceeds for prepayment of outstanding borrowings and for funding the capital expenditure requirements.