Flurry of flotations driven by surging stock market
The IPO of Indian matchmaking website Matrimony.com comes amid a flurry of companies going public in the country and a strong demand for them.
On Friday, ICICI Lombard, an insurance company, became one of the latest major firms to go for an IPO to raise up to US$890 million. SBI Life Insurance, a division of State Bank of India, will launch India’s first billion dollar IPO in the past seven years. The share sale is set to open on Wednesday and run for three days, with share scheduled to begin trading on October 3.
Stock markets have surged in India this year, hitting a series of record highs, and demand for IPOs has been strong amid positive sentiment. There have been about 20 listings this year in India.
Money raised from IPOs this year in India already totals $3bn compared to last year’s $4bn raised during the whole year, according to figures from Reuters.
Many of these listings are proving to be the first of their kind in India. For example, Matrimony.com is first matchmaking service to list in India and during its three day IPO launch this week, it ended up being more than four times oversubscribed.
The ICICI Lombard listing is also considered to be path-breaking.
“ICICI Lombard is the largest nonlife private sector insurer in India,” says Siddharth Purohit, a senior equity research analyst for the banking sector at Angel Broking.
“Backed by strong parentage, and under penetration of non-life insurance business in India, the company has been on a strong growth path.”
Other insurance companies are expected to follow suit with IPOs in the coming weeks, including HDFC Standard Life Insurance and India’s General Insurance.
Analysts say that demand for equities is being boosted by wariness around other investment sectors in India, particularly real estate.