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Expert view: IPO market may see a stronger pull after the Budget 2024, says Mahavir Lunawat of Pantomath
Posted On 01 Jul 2024
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Expert view: Mahavir Lunawat, the founder and managing director of Pantomath Financial Services Group, says favourable market conditions, high liquidity, a conducive growth environment with stable interest rates, and benign inflation have facilitated a boom in the IPO market. He believes the IPO market will experience a stronger pull after the Budget. In an interview with Mint, Lunawat shares his views on why retail investors are bullish on the IPOs and what upcoming IPOs may garner strong responses.
Edited excerpts:
Why are we witnessing a barrage of IPOs? How do you see the trend evolving in the IPO market after the Budget?
First of all, a combination of favourable market conditions, high liquidity, a conducive growth environment with stable interest rates, and benign inflation has encouraged companies to go public.
This, along with good returns generated by IPOs in the last two to three years, has positively impacted investor sentiments towards IPOs, creating a buoyant market for IPOs.
Regulatory changes and government policies that aim to improve the ease of doing business and promote growth have facilitated this trend.
Per our observation and trend analysis, we anticipate the IPO market will experience a stronger pull after the Budget.
Apart from massive spending on infrastructure and capex, the current government has been taking various initiatives to promote startups, digitisation, and infrastructure developments, which in turn is leading to private capex and creating a favourable environment for companies to raise capital through the primary capital market.
What has facilitated the growth of the Indian primary market?
The growth of the Indian primary market can be attributed to multiple factors. Key among them are:
Economic growth: India’s strong economic performance has recently enhanced investor confidence and attracted domestic and international investors.
Government spending and the start of the capex cycle: In the last two to three years, the government has spent huge amounts of money on infrastructure and capex.
This is followed by favourable policies like corporate tax cuts, the PLI scheme, Make in India, and housing/water/electricity/internet for all.
This led to the start of the private capex cycle, which in turn has led to companies tapping the equity markets to raise growth capital for capex.
