Gold Rush on D-Street

The primary market is about to see a scramble to raise funds through a flurry of public issues form companies across sectors

- NILANJAN DEY

One of the best ways to counter temptation is to yield to it. For the average bargain hunter looking for the best floats in the primary market, temptations these days are a dime a dozen. These come in the shape of a thick IPO (initial public offer) pipeline which, at this very moment, houses a raft of issues. The market resembles a wild scramble featuring offers ranging from biotech and healthcare to food delivery and financial services companies.

The robust IPO dashboard implies a marked demand for new issuances from a corporate sector which, despite the pandemic, is looking to raise fresh capital from investors. The latter have eagerly heeded the call, a trend that is reflected quite adequately in the mobilisation figures.

Indeed, a number of primary offers have lately garnered large-scale support. For reasons that will be perfectly understood, the obvious enthusiasm is partially on account of those who have sought quick and early exits for what is often euphemistically called ‘listing gains’.

Many of the ordinary investors who seek quality IPOs are, as always, driven by their desire to cherry pick potential gainers from among a wide basket of candidates. A section of them clearly root for the most popular players. One of the latter may well be Zomato currently billed as one of the strongest names in the contemporary economic landscape. Ditto for Paytm, which is said to have lined up a mega IPO later this year.

An initial offer, as everybody will agree, may serve an aspiring corporate in two definite ways. One, a company can mobilise capital by going public and letting investors (those who are successful in securing allotments) own its stock. Two, it provides (after listing, which of course follows soon after) an exit for those who already hold shares.