The success of Mankind Pharma’s Rs 4,326-crore IPO, the biggest this year and the third-largest since 2022, augurs well for the moribund public issue market, which has seen just six issues this year. Mankind Pharma IPO was massively oversubscribed, at 15.3 times, at close yesterday. The portion for qualified institutional buyers was subscribed 49.16 times, while that for non-institutional investors was subscribed 3.8 times. The retail portion saw a subscription of 92%.
Mankind IPO success augurs well for quality companies going to primary market
“The company’s performance and management track record that led to the quality of the anchor book buoyed the sentiment for the main book. This is also perhaps the largest pharma offering this calendar year anywhere in the world and could lead to a revival in the primary market here in India,” said a banker involved with the issue. The person, however, was quick to add that given the global volatility, the current environment is only conducive for good quality companies. It will not be a market, which will open up for anyone and everyone.
IPO momentum to increase in Indian market
Veenit Surana, partner, EY India said, “The India IPO market has shown resilience in Q12023, despite ongoing global uncertainties and relatively smaller issue size. The market’s strength is a testament to the Indian economy’s potential for growth. We expect the IPO momentum to increase in future, with domestic and international investors playing important roles.”
One of the reasons behind companies having been reluctant to tap the market is sustained outflows from foreign portfolio investors. FPIs pulled out $3.5 billion and $647 million from the Indian market in January and February this year, but have net bought shares worth $967 million and $938 million in March and April.
IPOs in pipeline: Check how much money companies plan to raise
“In the past, there have been instances when a successful IPO during a lull period has boosted the sentiment. Let’s hope the same will be the case this time and that Mankind’s success gets the attention of bankers and companies waiting to tap the market,” said Pranav Haldea, managing director, PRIME Database. Around 15 companies filed DRHPs in Q1 of 2023. Fifty-four companies proposing to raise Rs 76,189 crore hold Sebi’s approval at present, according to a note by Prime Database. Another 19 firms looking to raise about Rs 32,940 crore are awaiting the regulator’s go-ahead. Out of these, four are NATCs which are looking to raise roughly Rs 8,100 crore.