By Ruma Dubey

While the secondary market is looking lackluster, hunting around for a trigger, the primary market is seeing some blockbuster action.

Take a look at this statistics. In 2014, there were 6 IPOs and they managed to collect Rs.1261 crore. Prior to that, in 2013, there were just 3 IPOs and they garnered Rs.1284 crore. As against this, in this fiscal, till date, 16 IPOs have collected Rs.7500 crore. And this is not the end…there are so many more waiting and not just small time issues, we are going to see issues from some big names too.

Right now, the buzz is from Indigo Airlines; its IPO, to garner over Rs.3000 crore is scheduled to open on 27^th Oct and immediately on the next day, 28^th Oct, SH Kelkar , well know perfumers will open their Rs.500 crore IPO.

There also seems to be an appetite for these stocks, despite the high pricing, which leaves so little on the table. CCD issue was oversubscribed 80% and it was eyeing a target of Rs.1165 crore. Three issues in this month alone – aiming to raise over Rs.4600 crore.

And look at the pipeline – Matrix Cellular has already got SEBI’s approval for its Rs.500 crore issue. Ratnakar Bank is planning on a Rs.1200 crore but its issue is being held up due to past ghosts haunting its present.  L&T Infotech is an IPO eagerly awaited where parent company, L&T will dilute 11% of its stake. It recently filed its DRHP with SEBI – on 29^th Sept. Another big brand name is VLCC – it filed its DRHP on 24^th Sept and it hopes to raise over Rs.500 crore. Another big issue is from Alkem Labs which plans to raise around Rs.1500-1800 crore. One more well-known name is Bharat Matrimony which plans to raise Rs.350 crore. Microfinance institution Equitas Holdings filed its DRHP yesterday, 20^th Oct and it hopes to raise Rs.1200 crore. Parag Milk Foods, which sells products under the brand name of ‘Gowardhan’ filed its DRHP on 1^st Oct and it aims to raise around Rs.1000 crore. One issue which is sure to raise a lot of interest is Narayana Hrudayala, run by the famous Dr.Devi Shetty – it filed its DRHP on 1^st Oct and it wants to raise Rs.700 crore. Antivirus software maker Quickheal Technology is also joining the bandwagon and it plans to raise Rs.1200 crore.  Diagnostic and pathology laboratories chain, Dr Lal PathLabs filed its DRHP on 16^th Sept and it hopes to raise Rs.700 crore.  Bangalore-based HealthCare Global Enterprises Ltd (HCG), one of the largest cancer treatment hospital chains in the country is also going to try its luck in the IPO market, hoping to raise Rs.600-700 crore.

Thus what we are seeing now is that well-known brand names are coming to the market and the average issue size is around Rs.500-700 crore. Indigo might be the biggest IPO of this year. This increase in size of issues, not mega yet but not less than Rs.500 crore is a good sign as it heralds an air of optimism in the economy. The past issues of the year have done well – Syngene is today quoted 16% above its issue price, Manpasand Beverages is 34% higher, PNC Infratech is 42% up VRL Logistics is 31% up; there are equal number of issues which are streaked red, where investors are staring at a loss over IPO price. But overall, the picture looks good.

This revival of the IPO market is very critical to get retail investors back to investing and consumer-centric companies with established brand names is probably the best way to get them interested and get confident about the market.

But at the crux of all this lay one big make-or-break fact – right pricing of the issue. If priced too high, as is the case in most of the times, it will scare away and scald the investors; it will bring back nightmares they have suffered in the past. For now, the confidence of retail investor is zilch when it comes to IPOs. They have all burnt their fingers so badly that now they do not want to even go anywhere near IPOs, even if it is a quality issue and pricing is ok. Investors are just not able to shake off the feeling that all promoters are greedy and out to swindle them.

Confidence can be built only over a period of time. A few quality issues, priced right, leaving some money for the investor to make will restore the faith back. But will promoters agree to price lower so that investors can gain?  No, they would rather postpone their IPOs. Lets see how these IPOs, if and when they hit the market, fare on listing.