How market uncertainty will impact India Inc's fund-raising plans?

The uncertainty in the secondary markets and rising  are likely to cast a shadow on the primary market activity, as India Inc is likely to either delay listing or alter its fund raising plans, believe analysts. 

Financial year 2020-21 (FY21) was one of the best years for the primary markets. According to Prime Database, 52 Indian corporates raised Rs 1.11 trillion via the initial public offer, or IPO route alone. 

For FY23, it had pegged this fund raise at a massive Rs 1.4 trillion, including the LIC IPO. 

A total of 54 companies, Prime Database said at the start of this fiscal, held Sebi approval for the fund raise. Another 43 companies, it said, were looking to raise about Rs 81,000 crore where Sebi approval was still awaited.

Unless absolutely necessary, Rahul Arora, chief executive officer for institutional equities at Nirmal Bang, said, promoters will defer their fund raising requirements as debt is getting more expensive and their equity will not fetch companies the price it would have six months ago. 

Investors, too, have suffered. The stock of Life Insurance Corporation of India – the biggest IPO in Indian history that garnered over Rs 20,000 crore from the primary market is also languishing – down around 28 per cent till date since its listing in April 2022. 

In the past six months, the S&P BSE Sensex and the Nifty50 have lost around 7% each on weak global cues.

G Chokkalingam of Equinomics Research, too, expects the primary market to remain under pressure. 

Speaking to Business Standard, G Chokkalingam, Founder and Chief Investment Officer, Equinomics Research, pimary markets dependent on the secondary market performance. A sharp fall in the secondary market has seen the primary market suffer a lot, he said adding that two more quarters of pain in store for the primary market. 

On Tuesday, the markets are likely to remain range-bound with stock specific action likely to continue.