14 May, 2021

To Surf A Rising Wave

Primary markets gear up, the small investor is in for the ride. Mind the sandtraps.

To Surf A Rising Wave
After being comatose for nearly seven years, the primary market seems to be finally reviving. Led by PSUs, the first 11 months of the current fiscal have seen 24 issues raise Rs 6,372 crore, compared to six issues for Rs 1,038 crore last year. The ongc issue in March, the largest ever, targeting nearly Rs 10,500 crore would, of course, be the mega event. With some other issues worth Rs 900 crore materialising in March, this fiscal may end up with a phenomenal catch of Rs 17,772 crore. The highest ever in the past was Rs 13,312 crore in full 1994-95!

The good news is that there are few IPOs for new projects, which typically bring more risks. Most of the mega offerings are from well-established entities, either divestments by the government or VCs or fresh capital raisings by big companies, banks and PSUs. Moreover, this time there are fewer but bigger issues as against a number of small issues in past booms.

The PSU offerings though have not turned out to be the great retail-oriented stories as was...

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