Nine companies filed for IPOs in July, the highest since March 2023

Nine companies filed draft red herring prospectus (DRHPs) in July, the highest since March 2023. The optimism in companies to tap into the public market has come from the recovery of equity markets from March lows and foreign portfolio investor (FPI) flows.

DRHP is a preliminary prospectus filed before an initial public offering (IPO) containing key details such as the number of shares offered, financial results, and risk factors.

Those who filed their offer documents in July include National Securities Depository (NSDL), Muthoot Microfin, ESAF Small Finance Bank, and Suraj Estate Developers. Some of them have refiled with reduced issues after gauging the market feedback. After hitting record high late last year, the benchmark indices plunged as much as 10 per cent between December and March.

Only five companies launched their IPOs in the first five months of 2023. However, the recovery since March has given a fillip to new filings. Bankers said the filing shows the confidence issuing companies have in the current market, given the performance of the secondary market, and the performance of IPOs both in terms of subscription and post-listing gains. More companies are likely to file their offer documents in the coming months.