IPO boom expected to break new record | Wilnesh News

This report comes from this week’s CNBC “Inside India” newsletter, which brings you timely, insightful news and market commentary on the emerging powerhouse and the big players behind its meteoric rise. Like what you see? You can subscribe here.

Investors looking to profit from India’s growth often focus on storied conglomerates such as Reliance Industries and Adani Enterprises Run by national tycoons or technology startups changing the way people live their lives.

One of the names sparking renewed interest in IPOs is Human pharmaceuticals — a manufacturer of condoms and pregnancy test kits — last year. While the company’s business isn’t a standout, it does provide steady revenue growth and healthy profits.

However, the real takeaway It’s in seemingly ordinary areas of an economy experiencing phenomenal growth that attractive opportunities can be found.

India’s IPO boom shows no signs of abating, with 130 new companies listing so far this year, raising INR 313 billion, according to FactSet.

“I expect India to have a record-breaking year with a lot of IPOs and private equity exits,” said Neil Bahal, founder of Negen Capital., told CNBC’s “Inside India.”

“The IPO is not because some technology companies think they should raise money from the stock market instead of private equity. The fundamentals of the stock market are amazing, SEBI (Securities and Exchange Board of India) supportive policies, retail participation and broad-based investment based on opportunities,” He said.

IPO mania

India’s tech startups are on the cusp of strong IPO momentum, with companies such as food and grocery delivery company Swiggy, online travel portal ixigo, software-as-a-service company Unicommerce and payments company MobiKwik at various stages of the process.

Dhruba Jyoti Sengupta of Wrise Private Middle East said the move comes as venture capital and private equity investors see the Indian stock market as “a good way to exit investments and influence retail investor participation”. He expects Ola Electric, Aakash Educational Services and PhonePe to go public in the future.

Ola Electric has been approved by SEBI US$660 million IPO. Sengupta expects the electric two-wheeler maker to be valued at “not less than” $4 billion to $5 billion.

Sengupta’s choice of Aakash Educational Services is unusual given its inadvertent involvement in parent company Byju’s bankruptcy case. However, what sets Aakash apart, the money manager said, is that it performs “extremely well” with several students scoring top marks in the exams. He added that the company was rumored to be going public this year and “raise some money quickly.”

Elsewhere, Sengupta saw WalmartIndian e-commerce marketplace PhonePe is about to go public thanks to its “excellent ecosystem”. While the company said it has no plans to go public, Sengupta said its expansion outside India through partnerships in the United Arab Emirates and Sri Lanka was “a classic sign that a company is considering an IPO.”

The number of overseas listings continues to increase

The allure of India’s stock market has trickled down to companies outside its borders – with foreign entities also hoping for a piece of India’s growth.

Hyundai India made headlines this week after reporting on its $2.5 billion initial public offering. According to reports, if successful, this will become the country’s next life insurance company of indiaWill be launched in 2022.

Indian stock exchanges are no strangers to foreign companies listing Indian entities, thanks to the following companies: Maruti Suzuki India, Hindustan Unilever, Siemens and ABB India.

Vikas Pershad, Asia equities portfolio manager at M&G Investment, said such listings strengthen the Indian market. He predicts that foreign companies are likely to follow this path “once they reach a certain scale.”

Is the market expensive?

Optimism about India’s IPO boom has sometimes been marred by concerns that its stock market is overvalued and whether it is headed for a bubble.

India’s price-to-earnings ratio is about 21 times, which global emerging markets strategist Malcolm Dorson admits is “a bit expensive.”

However, he said it represents good relative value compared to other emerging markets.

“When we look at India, we see continued growth in the economy and earnings per share, higher profitability,” Global X’s Dolson told CNBC’s Inside India. Global One of the management companies.

“We need to look beyond P/E and price and focus on intrinsic value. India now offers high-quality growth.”

How to invest in India, the world’s fastest growing major economy. India is known as the “perfect” emerging investment market. How global investors can participate.

A week after the results of the Indian general election were announced, Indian stock markets moved more cautiously. this nifty 50 The index is set to gain 0.5% this week. The index has gained 7.67% this year.