The current market correction may force the IPO-bound companies which have filed draft red herring prospectus (DRHP) with the SEBI to rework their plans, Yatin Singh, CEO of investment banking at Emkay Global Research, said on Thursday.
He noted that the maximum permissible change in the fundraise is only 20% in the case of initial public offering and 50% in the case of offer-for-sale. Even if they exercise this option, some of the sectors which have corrected more like defence, power and ancilliaries, capital goods and railways will create a technical burden for the selling shareholders as they had a different consideration in mind.
He also expects more confidential filings to happen as companies are not really sure that they will achieve what they promised.
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In a press release, Emkay said 2024 saw 92 initial public offerings (IPOs), through which companies raised over Rs 1,62,261 crore. Also, companies raised over Rs 1,36,424 crore via 91 qualified institutional placements (QIPs). According to its data, the number of IPOs in January-February 2025 was only 10 compared with 15 in the year-ago period. The number of QIPs in the same period was only 7 compared with 18 in the year-ago period.
At the same time, it added, “while the correction in the market has slowed down activities in the deal street, the government divestment plan is likely to provide a push to the fund raising activities.”
Public sector is turning out to be a material client for investment banks in India, according to the release. The Department of Investment and Public Asset Management (DIPAM) has set a divestment target of Rs 47,000 crore for FY26 which is a huge opportunity for investment banks in FY26 and beyond.
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