Kotak Mahindra Capital Company (KMCC) believes the initial public offering (IPO) market may see heightened activity in CY2021. The investment banking firm said on Monday IPO activity is expected to be dominated by resilient sectors such as new-age technology, healthcare and consumer. Recovering sectors such as hospitality, commercial real estate (REITs) and the banking, financial services and insurance (BFSI) sector could also feature prominently.
The investment bank believes the markets could witness more REIT IPOs and qualified institutional placements. The robust IPO pipeline is expected to remain due to ample liquidity, and many unlisted companies have started communicating with investment bankers with an intention to list their companies earlier than previously envisaged. In CY2020, IPO volumes jumped 2.25 times to Rs 45,000 crore from Rs 20,300 crore in CY 2019. The surge in IPO and QIP fund-raising helped the overall capital market activity to almost double to `1.89 lakh crore in CY2020, from Rs 1.07 lakh crore in CY19.
The year witnessed India’s largest rights issue (Reliance Industries), followed by large fund-raising by top private lenders to accommodate Covid-related provisioning.
V Jayasankar, senior executive director and head ECM, KMCC, said the outlook remains optimistic for the ECM business. “We may continue to see heightened IPO activity dominated by resilient sectors like new-age tech, healthcare and consumer.
The need for growth capital, deleveraging to support growth as well as building buffer capital to face challenges arising on account of Covid will see a buoyant fundraising activity.”
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