IPOs set to get ₹20k cr from retail investors
MUMBAI: Retail investors are expected to plough at least ₹20,000 crore into India’s redhot primary market in 2021, lured by sterling listing day gains of recent share sales and falling returns from competing asset classes.
Companies have raised ₹18,447 crore from retail investors through initial public offering (IPO) this year, according to data from primary market tracker Prime Database and stock exchanges. The IPO of Paytm, the country’s biggest yet which opens Monday, alone has a retail book of ₹1,830 crore.
The substantial amount highlights the growing significance of retail investors in Indian markets since the pandemic outbreak. Typically, retail investors crowd IPOs for quick listing day gains, a behaviour enhanced by this year’s handsome gains.
Shares of companies such as Paras Defence & Space Technologies, Tatva Chintan, Indigo Paints and GR Infraprojects more than doubled on listing this year.
These companies saw the retail portion of their share sale subscribed in double digits. The most highly subscribed retail books this year include names such as Nureca Ltd (140 times),
Paras Defence (100 times), Nazara Technologies Ltd (67 times) and Easy Trip Planners Ltd (63 times).
“Retail investors will continue to participate in IPOs in a big way as more than 80-90% IPO listings and post-listing performance has been positive. I also believe the ease of applying in IPOs due to UPI, Aadhaar-based authentication, and apps launched by various brokers has been a very big driver,” said Jibi Jacob, managing director & head of equity capital markets, Edelweiss Investment Banking.
According to another investment banker, the behaviour of retail investors has also seen a sharp departure from earlier days, when they would wait till the last day of a public offer to gauge institutional investor demand. Now, if there is a strong buzz around an IPO, its retail book gets subscribed within the first couple of hours of the IPO opening, he said, speaking on condition of anonymity as he is not authorized to speak to media.
Retail investors have been making their presence felt across the capital markets. A record 15.37 million demat accounts were created during April-September, according to Sebi data. This compares to 14.2 million new demat accounts in all of FY21. Holding of retail investors in companies listed on NSE stood at 7.13% on 30 September 30, up 2021, from 7.01% in yearago period, according to Prime database.