Indian exchanges saw only four initial public offerings (IPO) during the June quarter as economic activities continued to bear the brunt of coronavirus pandemic, said a report by EY India. These IPOs, cumulatively worth $2.08 million, were in the Small and Medium Enterprises (SMEs) segment. The median deal size was $0.38 million.
Laxmi Goldorna House Ltd, Nirmitee Robotics India Ltd, Billwin Industries Ltd and DJ Mediapoint & Logistics Ltd came out with their IPOs during the June quarter, the EY India report said. There were 14 and 11 IPOs from the SME category in Q2 2019 and Q1 2020, respectively.
"Indian stock exchanges (BSE and NSE including SMEs) ranked seventh in the world in terms of number of IPOs in Q2 2020. There were no cross-border deals and there were no IPOs in the main markets," the EY India report said.
Sandip Khetan, Partner and National Leader of Financial Accounting Advisory Services (FAAS) at EY India, said the experience in the last three months has been unprecedented as COVID-19 has severely impacted both, human lives and the economy.
"Similar to global markets, there has been limited to no activity in the Indian IPO market. Investors and analysts are keeping a close watch on the latest updates provided by companies about their performance as valuations become attractive for deal making," Khetan said.
Meanwhile, even though economic activities remain restricted due to coronavirus pandemic, companies have started to think about their long-term growth plans. In this regard, they have once again started to engage in conversations towards their IPO preparation in this economic slowdown, EY India said on Sunday.
"Companies are looking to utilise the current time toward preparing for future fund raising. We expect IPO activity to pick up during the end of 2020 or early 2021," Khetan added.
EY India further said that marquee activities by Jio Platforms pushed Indian PE/VC (Private Equity/ Venture Capital) investment in May/June to more than $10 billion.
(With PTI inputs)