How do you think IPOS have performed in 2017 so far?
We believe that in 2017, the performance of the IPO market has remained satisfactory. This year so far, close to ₹10,000 crore of funds have been raised through the primary equity offerings. This year, ₹8,200 crore have also been raised by the Infrastructure Investment Trusts, which is a new instrument introduced in the Indian capital markets. These Invits have also seen good interest from the investors. The IPO listings were mostly satisfactory and we believe that the quality of IPOS has also been good this year so far. One of the highlights of this year’s primary market was listing of Avenue Supermarkets which gathered huge interest from the investors during subscription as well as upon listing. CDSL has also seen huge subscription. One of the main reasons for the good performance of IPOS this year has been ample liquidity and high investor confidence stemming from the fact the domestic macros are improving and economy is expected to do well going ahead.
Looking at current market situation, what strategy should be adopted by the retail investors for IPOS?
We believe that investors should stick to the business fundamentals and valuations rather than getting carried away by market liquidity, which may lead to investing in the poor quality IPOS. One should keep focus on the quality of the business, financial performance, scalability of the business model, promoter’s background and valuation.
Will 2017 be a better year than 2016 for IPO investors? Your thoughts.
Yes, so far good quality IPOS have raised money in the markets, and looking by the trend, we believe that the performance of the primary market is likely to remain better this year as investor confidence has remained very optimistic. If macro data continues to improve, we expect that the IPO performance will remain healthy this year.