By Dilip Davda
Six negative weeks in a row now for the secondary market, and the pressure isn’t letting up.
Rising geopolitical tension, boiling crude oil prices, and continued volatility in the rupee-dollar pair are all weighing on sentiment together.
The primary market keeps moving
Even with all that noise, the primary market remains genuinely hectic. As expected, we have more than 30 SME IPOs and around 12 mainboard IPOs lined up in the pipeline right now.
With this much choice on the table, investors have a real opportunity to be selective, but that also means the responsibility is on them to look at techno-fundamentals, take advice from their financial advisor, and do their own due diligence rather than simply chasing GMP.
Case in point: NSE. The issue started out with a grey market premium of over 300, and that number has now collapsed to around 40.
Based on where things stand, the expectation building in the market is that NSE could actually list at a discount to its issue price.
This is genuinely worth watching closely, because how NSE performs on listing will have a cascading effect on sentiment heading into Reliance Jio’s proposed mega IPO, which is planning to enter the market on October 30.
NSE and Sonaselection India both close for subscription today, so we’ll have early signals soon on where sentiment is really headed.
Six IPOs opening this week
Between the 22nd and 24th of September, we have about six IPOs opening
Three of them are drawing genuinely strong interest: Elevate Campuses, ArMee Infotech, and Swastika Infra.
Three more, Adroit Industries, A-One Steels India, and Varmora Granito, round out this week’s mainboard lineup. Here’s the honest caveat: even though these companies have performed well on fundamentals, the segment as a whole is heading into a stretch of real volatility given how the global situation is deteriorating.
The Ukraine-Russia war looks close to escalating further, and there are reports of Ukraine striking a Russian nuclear energy plant. On top of that, Trump has reportedly issued a final threat to Iran, warning of severe consequences if they don’t comply.
Developments like these have raised genuine fears of a wider global conflict. This weekend looks critical, and honestly, all we can do is watch and hope nothing escalates in a way that shakes the global economy further.
SME IPOs: greedy pricing, but the subscriptions keep coming
On the SME side, last week saw about six IPOs, and this week that number jumps to 13. As I’ve said repeatedly, pricing remains the core issue here, most SME IPOs are priced greedily, leaving very little on the table for investors. And yet, people keep applying.
Part of the reason is simple lot economics: even a modest Rs 5 premium on listing, multiplied across a lot size of 1,500 to 4,000 shares, can still deliver a decent return within a week of allotment if you’re lucky enough to get shares.
What’s genuinely new and worth flagging is that SME IPOs are now attracting QIB quota participation, something that was virtually unheard of on this platform earlier. Even anchor investors have started taking part in SME issues, which is a real shift in how this segment is being perceived.
At the same time, minimum lot sizes have effectively doubled, from around Rs 1 lakh to Rs 2 lakh-plus, and subscriptions are still coming in heavy despite that higher entry bar.
I do expect SEBI to bring in broader corrective steps for the SME market before too long, because the swings here cut both ways: a positive listing brings a good reward, but a discounted listing can just as easily wipe out a meaningful chunk of capital.
So my message stays consistent, be very alert with SME IPO applications specifically. Do your own due diligence, consult your financial advisor, and only then take your final call on investing. Every investment in the securities market carries an element of market-related risk, so stay cautious and invest wisely.
