Primary markets to see first IPO in two months, but activity to remain subdued on volatility

By Swaraj Singh Dhanjal

  • 26 Mar 2022

Even as the Indian primary market will see its first IPO in almost two months with education company Veranda Learning Solutions launching its Rs200 crore share sale on 29 March, industry experts believe that most companies continue to remain on the sidelines due to the ongoing volatility in the stock markets.

After a record calendar year 2021 for the IPO markets, which saw Rs1.18 trillion raised, calendar year 2022 has so far seen just three companies launch their initial share sales, raising Rs7,429 crore, shows data from primary market tracker Prime Database. These include Adani Wilmar Ltd, Vedant Fashions Ltd and AGS Transact Technologies Ltd. The last IPO - Vedant Fashions - launched on 4 February.

“Although the pipeline continues to remain very strong, the last two-three months has hardly seen any activity. You may see a few deals pushed by the fact that the companies need to raise funds in near term and the regulatory validity of financials reported in the draft prospectus may expire if the launches get delayed, which would then require them to spend more time in updating their prospectus with the latest financials further delaying their fundraise plans,” said Pranav Haldea, managing director, Prime Database.


The secondary market needs to stabilise before you see activity returning to the primary markets, he said, adding that historically, whenever markets are volatile, you always see a pause in primary market activity.

“The biggest concern for companies is volatility in the secondary market. Liquidity is not as much of a challenge. While FIIs have been pulling out money, domestic investors continue to buy and provide support to the market. For companies, an IPO is a once in a lifetime event. So companies are willing to wait a few months if market conditions are not favourable,” added Haldea.

Industry experts said that most launches continue to be on hold for now, though they expressed optimism that a few launches may happen in the second half of April.


“Veranda is a small Rs200 crore IPO. Market has not yet opened up for IPOs. Blocks (large stake sales in secondary markets) have been happening so we hope that IPOs should also start happening soon - perhaps from mid-April onwards,” said an investment banker advising several companies on their IPO plans, speaking on the condition of anonymity.

Another investment banker that Mint spoke to, who also commented on the condition of anonymity, said that the near term activity in primary markets will depend on the success of the current deals in the market.  

Apart from Veranda Learning Solutions IPO, Patanjali owned Ruchi Soya Industries is looking to raise xxx crore through its follow-on public offer, which opened for subscription on Thursday.  


“People are keeping an eye out. If this (Veranda) and Ruchi Soya go well then we can expect a lot more action. Also, with LIC timelines still not decided, some people may look to launch their deals before LIC comes to the market,” said the second banker cited above.

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