Flurry of flota­tions driven by surg­ing stock mar­ket

The National - News - - BUSINESS | IN DEPTH -

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.

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