While the secondary market saw a sharp decline in October, reaching levels not seen in more than four years, the IPO market shows no signs of cooling. Investor interest in new listings has remained robust, even in the face of broader market volatility.

A total of 21 companies have debuted on Dalal Street in October so far, with six more expected to list soon, which could take the total to 27, according to Trendlyne data. This strong string of IPOs demonstrates continued momentum in primary market activity, even as secondary markets experience increased volatility.

The month of October notably saw the country’s largest IPO to date, that of Hyundai India, which raised ₹27,870 crore from Indian investors through the offer for sale (OFS) route. However, retail investor interest in this offering has been surprisingly low, resulting in less than full subscription.

This lack of enthusiasm on the part of individual investors is unusual, particularly for a high-profile listing of this magnitude. Some analysts believe the weak demand from local investors is due to concerns that the IPO’s valuation has not been fully realized, leaving little room for a potential listing gain.

Recently, IPOs with large issue sizes have seen moderate listing gains on the exchanges, as seen in the cases of Ola Electric Mobility, LIC and Paytm.

Of the 21 stocks launched in October, 17 were in the SME segment, while the remaining four were in the core panel category, namely Hyundai Motor India, Garuda Construction and Engineering, Diffusion Engineers and KRN Heat Exchanger and Refrigeration.

These four companies collectively raised ₹28,633 crore from investors, with Hyundai Motor accounting for the majority of this fundraising. In terms of listing, KRN Heat Exchanger had a remarkable debut, as shares debuted at ₹478.80 each, which is 117.6% higher than the IPO price of ₹220 piece.

At current levels, the stock is trading 93.6% above its issue price. Diffusion Engineers and Garuda Construction and Engineering also made decent market debuts, listing 20% ​​and 12% higher than their IPO prices respectively.

On the other hand, Hyundai Motor shares were listed at a 7.2% discount at their IPO price of ₹1960.

17 SMEs make their debut

In the SME segment, 17 stocks were listed, with the majority receiving a strong response from retail investors.

Seven out of 17 achieved subscription rates above 100%. Notably, Thinking Hats Entertainment’s IPO was subscribed 329 times, followed by Freshara Agro Exports with 224 times. Among the top performers, Sahasra Electronic Solutions shares are currently trading 152% above their issue price, while Techera Engineering India stock is trading 127% above its IPO price on the stock market.

Individual investors show strong interest in the SME categorymotivated by the attraction of high returns and the opportunity to participate in the early stages of growth of these companies. This enthusiasm has also given rise to multiple warnings from the market regulator, SEBI.

Draft Red Herring Prospectuses (DRHPs) of several companies indicate that the primary purposes of fundraising include repaying debt, financing expansion projects and meeting working capital needs.

Meanwhile, six more IPOs that completed their bidding period in October are expected to be listed between October 28 and 29. These include Waaree Energies, Deepak Builders & Engineers India, Premium Plast, Danish Power, OBSC Perfection and United Heat Transfer.

Disclaimer: The opinions and recommendations given in this article are those of individual analysts. These do not represent the opinions of Mint. We advise investors to seek advice from certified experts before making any investment decisions.