FirstCry, Unicommerce make a stellar debut: Will the IPO party continue?

The successful listings of Ola Electric and FirstCry reinforce investor appetite for pure-play EV and consumer tech companies with strong business moats. Despite a global sell-off during the launch of these two IPOs, Indian equity markets demonstrated depth and liquidity to absorb large offerings.

Dipti Sharma
Published14 Aug 2024, 07:00 AM IST
In FY24, the number of IPOs surged by 66%, rising from 164 in FY23 to 272.
In FY24, the number of IPOs surged by 66%, rising from 164 in FY23 to 272.(iStock)

Tuesday's listings of shares of FirstCry and Unicommerce are the latest in a series of remarkable market debuts for companies. Infact, the recent wave of listings not only highlights enthusiasm among investors but also reflects a broader confidence in the companies' business models.

Strikingly, even the recent global market sell-off failed to dampen investor spirits. But the question is: Will this enthusiasm continue? Experts said it likely will.

“We are likely to see several high-quality, successful venture and private equity-backed companies coming to the market in coming months," V. Jayasankar, managing director and head of equity capital markets, Kotak Investment Banking, said.

Successful listings

The successful listings of Ola Electric and FirstCry reinforce investor appetite for pure-play EV and consumer tech companies with strong business moats. He observed that despite a global equity sell-off during the launch of these two IPOs, Indian equity markets demonstrated the depth and liquidity to absorb large offerings.

Many large IPOs are expected in the second half of FY25, experts said.

Read more: India’s first small and medium Reit faces pushback from existing investors

In FY24, the number of IPOs surged by 66%, rising from 164 in FY23 to 272. The total amount raised also increased by 24%, growing from 54,773 crore in FY23 to 67,995 crore in FY24.

Investor sentiment

Prashant Rao, director and head-equity capital markets, Anand Rathi Investment Banking, said that investors are confident because they have seen strong post-listing performance from the IPOs over the last few quarters. This makes investors believe this trend should persist, expecting similar returns in the future as well, he added.

Rao highlighted that the average returns of companies (as on July 31, 2024) that got listed since January this year have been more than 45%.

With the mutual fund industry's assets under management (AUM) having surged, folios reaching an all-time high and systematic investment plan AUM hitting fresh peaks, Vaibhav Porwal, co-founder of Dezerv, believes there is a lot of liquidity in the market and fund managers and investors are on the look out for investment opportunities where they can deploy incremental capital.

Read more: Info Edge: Can JobHai.com replicate the success of Naukri.com?

He explained that while these new listings offer fresh opportunities, investors should not invest in these opportunities purely to capture the listing gains. In a bull market, some companies list at euphoric levels due to the popularity of certain themes, which can often result in unsustainable valuations.

Porwal emphasized that one should be extremely selective when investing in these IPOs and focus on the fundamentals of companies instead of relying on popular narratives.

Rao also cautioned that before investing in IPOs, investors should concentrate on key factors including fundamentals, financial track record, cash flows, business visibility, valuations, and the quality of the company's management.

Read more: Siemens in uncertain waters in India, but charts a global voyage

 

Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:14 Aug 2024, 07:00 AM IST
Business NewsMarketsIPOFirstCry, Unicommerce make a stellar debut: Will the IPO party continue?

Most Active Stocks

Adani Power share price

446.85
03:57 PM | 25 NOV 2024
-13.9 (-3.02%)

Power Grid Corporation Of India share price

342.85
03:59 PM | 25 NOV 2024
5.85 (1.74%)

Tata Steel share price

143.60
03:58 PM | 25 NOV 2024
0.8 (0.56%)

State Bank Of India share price

844.75
03:53 PM | 25 NOV 2024
28.7 (3.52%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Wipro share price

582.75
03:54 PM | 25 NOV 2024
11.35 (1.99%)

Federal Bank share price

213.00
03:47 PM | 25 NOV 2024
3.75 (1.79%)

HCL Technologies share price

1,892.00
03:52 PM | 25 NOV 2024
-7.05 (-0.37%)

Tech Mahindra share price

1,733.95
03:46 PM | 25 NOV 2024
-13.75 (-0.79%)
More from 52 Week High

Adani Green Energy share price

967.65
03:59 PM | 25 NOV 2024
-84.75 (-8.05%)

DCM Shriram share price

1,182.00
03:29 PM | 25 NOV 2024
-69.65 (-5.56%)

Vijaya Diagnostic Centre share price

1,159.25
03:29 PM | 25 NOV 2024
-56.75 (-4.67%)

Adani Energy Solutions share price

624.85
03:57 PM | 25 NOV 2024
-24.55 (-3.78%)
More from Top Losers

Railtel Corporation Of India share price

397.05
03:47 PM | 25 NOV 2024
32.15 (8.81%)

Central Bank Of India share price

56.89
03:59 PM | 25 NOV 2024
4.56 (8.71%)

Emami share price

693.05
03:49 PM | 25 NOV 2024
54.1 (8.47%)

Sumitomo Chemical India share price

554.35
03:29 PM | 25 NOV 2024
40.4 (7.86%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    79,645.00-10.00
    Chennai
    79,651.00-10.00
    Delhi
    79,803.00-10.00
    Kolkata
    79,655.00-10.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.92/L0.00
    Chennai
    100.90/L-0.13
    Kolkata
    104.95/L0.00
    New Delhi
    94.77/L0.00

    Popular in Markets

      HomeMarketsPremiumInstant LoanMint Shorts