IPO News: Many companies are preparing to bring IPO in the second half of this year, July-December 2022 or in the beginning of 2023 next year.
IPO News: Last month, the country’s biggest IPO LIC was open but due to many reasons it could not prove to be better for the investors. However, despite this, companies have not been discouraged to bring IPO and can bring an issue in the second half of this year in July-December 2022 or early 2023 next year. More than 10 companies have filed prospectus with SEBI in April-June 2022 and more than 40 companies have already got approval from SEBI and more than 50 companies are waiting for SEBI approval.
IPO activity across the world, including India, has been affected due to the global political situation, rising inflationary pressures and increasing interest rates. Talking about this year 2022, India is fourth in terms of number of IPOs with 49 issues worldwide and fifth in terms of funds raised.
IPO News: IPO will rain for the next six months, keep these things in mind before investing money
It takes 8-12 months to bring IPO
- If we look at the timeline of more than 50 recent IPOs, companies take at least 8-12 months to bring their issues. In this, on an average, three to four months are spent in getting approval from SEBI.
- Last year in 2021, 64 companies had floated IPOs, out of which around 50 companies got SEBI approval within an average of three months of filing the DRHP (Draft Red Herring Prospectus).
- After getting approval from SEBI, companies wait for better valuation and better market conditions. In this series, last year about 25 percent companies had filed DRHP again in view of better market conditions and were successful in getting approval. Last year, the Sensex had traveled 10 thousand points.
Employment for Women: LinkedIn’s big step for employment of women, here is the full detail
- Various stakeholders have to be appointed from time to time in the preparation of IPO so that corporate governance can be increased. Apart from this, work has to be done on legal and capital structure presence. Companies have to work on the audit process, financial results. Apart from this, you have to go through the comfort letter process, legal / bank due diligence. Then book building and price discovery means that the price band of the IPO has to be decided. All these processes take 6-9 months.
Keep these things in mind before investing money in IPO
Recent market volatility and rise in inflation and interest rates are short term challenges. Investors should pay attention to the business model, cash flow of the companies before investing in an IPO. If the companies have a good business model, cash flow and are positive about how the company will progress after the IPO, then you can invest money in the issue.
(Article: Sandip Khetan, Partner and Financial Accounting Advisory Services Leader, EY India और Veenit Surana, Associate Partner, Financial Accounting Advisory Services, EY India.)
