Experts on the current primary market believe that companies are delaying their IPOs due to geopolitical tensions and weak FIIs.
Uncertainty in the secondary market
According to Ravi Singh, vice president and head of research at Share India, companies are suspending their IPOs due to uncertainty in the secondary market. The current market situation is quite volatile. Due to geopolitical tensions and rising prices of expensive crude and other commodities, there is a possibility of an inflation-related downturn. He said that the reaction of the primary market affects the activity of the secondary market. Companies have suspended their IPOs for the time being due to high volatility in the primary market in the last few months.
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The Russo-Ukrainian war is a big factor
Manoj Dalmia, founder and director of Profitable Equities Pvt Ltd, said the companies had postponed their IPOs due to the war between Russia and Ukraine. He says inflation has become a major concern for companies due to rising crude prices. This is seen as a fall in the share prices of companies. LIC’s flagship IPO was scheduled to launch in late March, but is now expected to be completed only in the next financial year.
Companies like Go Airlines, API Holdings, Delivery, MQ Pharma had planned to raise around Rs 25,000 crore from the IPO, but the market is currently witnessing massive sales from foreign investors (FIIs). Larger IPOs require the support of FIIs
(Disclaimer: The opinions / suggestions / suggestions published here in this article are by investment experts only. Zee Business advises its readers to consult their investment advisors before making any financial decisions.)