IPO: IPO wave gains momentum as Tata Capital, LG Electronics eye October launch

The Indian primary market is gearing up for a busy season with heavyweight IPOs like Tata Capital and LG Electronics lined up for October. With liquidity already under focus, the concern is whether these large issues will affect market flows.

“After a lull in the first half with just 21–22 IPOs, the second half looks very optimistic. Nearly 20 issues have hit the line this week alone,” said Narendra Solanki from Anand Rathi in an interview to ET Now.

He acknowledged that fundraising of this scale could affect liquidity but ruled out major risks. “Yes, there may be some impact from large fundraising and festive spending, but I do not see it threatening. SIP flows and institutional money are keeping liquidity stable.”

FIIs Shifting Focus

Foreign institutional flows into secondary markets remain muted, but IPO participation is strong. Asked if this trend will continue, Solanki explained: “Short-term flows are volatile as they depend on global macros like rates and commodities. But long-term FIIs remain positive on India’s growth story.”

He added that while global uncertainty may cause brief pauses, India should continue to attract foreign capital in the medium to long run.

Valuations and Investor Outlook

On IPO pricing, Solanki admitted that valuations may appear stretched compared with the past. “Historically, issues look expensive. But these companies come from underrepresented sectors with large growth runways,” he said. He argued that the shift from unorganised to organised markets offers ample scope for expansion. “Many of these firms operate in small or moderate-sized sectors. That leaves a five-to-seven-year window of high growth.”

As the IPO pipeline gathers steam, market watchers will closely track liquidity in secondary markets. For now, robust SIP flows and steady institutional support are expected to maintain balance.