IPO activity in June qtr slows; momentum likely to gain in H2 2019: Report

The BSE and NSE witnessed four IPOs in June quarter 2019 as compared to five in the previous three-month period, a trend attributable to the "wait and watch" policy of investors amid general elections, as per a report. In SME markets, there were 12 IPOs in the gone by quarter.

The IPO activity during the June quarter also saw a decline when compared to the year-ago period which recorded seven such offerings. According to EY India IPO Trends Report: Q2 2019, "considering favourable results of the national elections, initial public offer (IPO) activities are likely to gain momentum in the second half of 2019."

India recorded a total of 16 IPOs in the second quarter of 2019 with stock exchanges BSE and NSE, including SMEs, ranking sixth globally in terms of the number of public offers, the report said. In SME markets, there were 12 IPOs in the quarter under review as compared to 39 in the year-ago period. In March quarter 2019, there were 13 public offers in SME markets.

"This may be attributed to the national elections that were held across India during this quarter. Investors had adopted a wait and watch policy, as there was uncertainty around the outcome of the said elections," the report said. Sandip Khetan, EY India, IPO Leader said after the historic mandate to BJP-led NDA, the government's priority should be to introduce policy-related initiatives to revive the economy.

"The 2019 finance budget will play a crucial role in spelling out the strategic agenda and the key initiatives of the new government and some of that will also be key in the revival of the economy and the IPO market," Khetan added. The report further said that 16 IPOs were spread across different sectors, such as base metals, transportation and infrastructure, healthcare and equipment.

As per the report, about 70 firms have received clearances from Sebi and approximately 19 are awaiting the go-ahead. In terms of global context, IPO activity continues to slow despite unicorns coming to market. Technology, health care and industrials saw the largest share of IPOs in January-June 2019, together accounting for 266 IPOs, raising USD 47.8 billion altogether, it said.