D-St calling: Startups rush to file for IPOs as sensex soars

MUMBAI: IPO street is buzzing again. The strong debut of HDB Financial Services on the bourses earlier this week is expected to fire up the momentum. Startups are adding to the IPO rush: Meesho on Thursday filed its draft IPO papers with markets regulator Sebi through the confidential route, seeking to raise up to Rs 4,250 crore through a fresh issue of shares.Primary market fundraising may hit $2.4 billion in July, almost matching the $2.5 billion peak seen in Dec 2024, edging past June's $2-billion mark, said Prakash Bulusu, joint CEO at IIFL Capital.Global Tensions EaseSince last week, Pine Labs, Shadowfax, Wakefit, and Curefoods have filed their draft papers. With markets making a comeback after geopolitical tensions eased in West Asia, more startups are expediting filing of draft papers.

SoftBank-backed Lenskart is expected to file draft papers in two weeks, sources said.

"After a five-month lull, the resurgence in India's IPO market reflects more than pent-up supply. Confidence is returning as secondary markets stabilise, geopolitical tensions ease, and institutional risk appetite strengthens. The immediate catalyst has been the calming of global jitters combined with the smooth absorption of large block deals like the Singtel-Bharti Airtel sale.

Besides, institutional investors are back in force," said Bulusu.Big Names Look To List TooFor the full year, the IPO market remains on track to raise $23-24 billion, with marquee offerings from LG Electronics India, NSDL, and JSW Cement lined up, Bulusu added. About Rs 1.7 lakh crore was raised through primary issues in 2024. From their April lows, the sensex and Nifty are up about 13%.The first batch of new-age IPOs swept the market in 2021, led by Zomato's Rs 9,375-crore issue.

The broadening of the local startup ecosystem and rising investor appetite for tech IPOs has nudged more companies in the space to tap the public markets for growth. While more than half a dozen companies, including Groww, PhysicsWallah, Boat, and Shiprocket, have filed their DRHPs since the start of the year, Zepto, PhonePe, Infra.Market, and Oyo are among startups firming up their IPO papers.

In all, some 123 companies have filed DRHPs with Sebi during Jan-June this year, against 52 firms in the same period last year, data sourced from Prime Database showed."A flurry of issues, however, also quite often pushes through IPOs of companies which come to market at valuations that are unreasonable and end up struggling post-listing. Investors, hence, should be discerning to assess the quality of the business and valuations at IPO," said Keyur Majumdar, managing partner at Bay Capital. The IPO pipeline is very strong and ever-increasing, and the second half of the year should see a slew of IPOs, said Pranav Haldea, MD at Prime Database.