Equity markets have been extremely volatile so far in 2022. Investors have found themselves torn between conflicting domestic and global economic outlook.
This mood has cast a spell on primary markets as well.
In the last 8 months, only 16 companies have tapped the primary markets via IPO route, raising around 40,300 crore rupees.
In comparison, data from PRIME Database suggests that 63 companies had raised a cumulative Rs 1.18 trillion via the IPO route in 2021.
Recently, online pharmacy PharmEasy withdrew its draft red herring prospectus filed with market regulator Sebi. It cited volatile market conditions and ‘strategic considerations’ as the reason for this withdrawal.
Besides, Dreamfolks Services, India’s largest airport service aggregator, too, had scaled back its issue size by 20% citing volatile market conditions.
According to Dara Kalyaniwala of Prabhudas Lilladher Capital Market, “The volatility in the secondary markets impacts issuer Company’s confidence, not only about the IPO sailing through, but also about the post listing response.”
That said, a meaningful revival of the primary markets, though some time away, may be driven by stable secondary market conditions amid better Q2FY23 results.
Investors will keenly watch inflation trajectory and actions of global central banks over the next few weeks.
On Thursday, the markets will reopen after a day’s holiday on account of Ganesh Chaturthi, and will track global cues besides reacting to GDP data for the first quarter of the current fiscal.
 "Fewer IPOs in 2022: How long before the primary market revs up?")
