IPO market eyes selective June revival after two-month lull

The IPO of Hexagon Nutrition, an offer-to-sale (OFS) worth about ₹139 crore, will open to subscription on June 5, while CMR environmentally friendly Technologies' ₹630-crore OFS is scheduled during June 3-5. In the SME segment, Merritronix, Liotech Industries, Vahh Chemicals and Genxai Analytics are among companies scheduled to tap the market during the month.

The improving June calendar follows a lull that saw only two mainboard IPO launches in April and none in might, as geopolitical tensions, evaporative markets and valuation concerns prompted several issuers to defer listing plans.

“We could see a selective pickup in June, however issuers are likely to remain valuation-vulnerable. Companies with strong fundamentals and reasonable pricing might proceed, while others could wait to greater stable market conditions," said Pranav Haldea, Managing Director at Prime Database Group.

There appears to be greater comfort among issuers than a couple of months ago, he said. “Companies are recognizing that markets rarely offer perfect visibility and many are willing to proceed if they see stable investor demand and acceptable valuations ."

Narinder Wadhwa, Managing Director and Chief Executive Officer, SKI Capital Services said, “Many companies are not cancelling plans however waiting to favourable issuance windows amid geopolitical uncertainty and valuation concerns." Companies with strong earnings visibility, consumption-led themes, financial services businesses and differentiated manufacturing stories could be among the first to test the market, he said.

Some issuers facing the prospect of updating financial disclosures or undertaking additional regulatory filings might choose to launch in June or July rather than incur further costs and delays, market participants said.

According to Prime Database, 161 companies with valid SEBI approvals and an estimated issue size of about ₹2.42 lakh crore are awaiting launch, while another 74 companies seeking to raise around ₹1.53 lakh crore are awaiting regulatory clearance.

Some of the larger approved issues awaiting launch are Credila Financial Services and Dorf-Ketal Chemicals India' IPO worth ₹5,000 crore each, followed by Continuum environmentally friendly Energy's ₹3,650 crore issue, Hero FinCorp's ₹3,600 crore, and Veritas Finance's ₹2,800 crore offer. Other big names like Reliance Jio Platforms, the National Stock Exchange, Zepto, and SBI mutual fund are also in the IPO pipeline.

“Due to poor market conditions and weak sentiments many companies with SEBI approvals have postponed their IPOs. This direction might persist till market conditions and sentiments enhance," said V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

While the mainboard market has remained subdued, SME issuances have continued, with companies such as SMR Jewels, M R Maniveni Foods, Yaashvi Jewellers, Rajnandini Fashion India and Aureate Tradde, set to June.

Market participants said a stabilisation in sentiment could unlock a much stronger IPO calendar in the second half of FY27.