IPO stands for Initial Public Offering and refers to that stratagem required by the companies in order to raise indispensable funds by selling its shares to the investors or the general public. The main aim of an IPO is to raise funds from the public in the primary market. Investors see IPO investment as a lucrative way of gaining finances as a part of their long term investments. But unfortunately, nowadays, the market’s enthusiasm has become basically nonexistent due to the coronavirus pandemic not only in India but across the world. We can’t really assess the present unbelievable uncertainty as no one exactly knows how long we will have to face this hazardous plague or how it will influence the economy. After all, the saddest part is that Covid-19 has started negatively affecting the nation’s economy.
Impact of Coronavirus on Indian Economy
The enormous coronavirus pandemic has led to an uproar in the stock markets of almost all nations, including India. The world’s financial markets have sunk in the recent few weeks, due to the increasing cases of Covid-19. The finances of most of the companies are going down, and few sectors have started experiencing a very bad time of recession. This pandemic situation has become so scary that many companies that were planning to go public this year have started to impediment their unveiling. Many of the companies have started postponing their IPO launch plans. The pandemic coronavirus is playing the role of a game-changer in the Indian economy if compared to the last year’s IPOs market, which isn’t analogous with the present economic situation.
The main point to upset any IPO market is uncertainty. As per experts, any huge changes which have happened in the stock market recently, in the past few months, are also uncertain. This means the IPO market is going to be pretty much challenging this year i.e., 2020. Yet some of the companies are running in profits, like the food and grocery delivery companies. Some examples are Swiggy or Zomato (delivering groceries), Netmeds (delivering medicines), or other e-commerce sites (which are only delivering health and daily essentials) due to the high demand for these products from every home. But many renowned companies are not performing well on the concept of stay-at-home, and this is negatively affecting their balance sheet.
Game Changed for Debut IPOs in 2020
Many IPO investment startup companies were targeting the first half of 2020 to kick off the process of IPO, but these plans are supposed to have ruined already by the spread of the coronavirus. For instance, if we take the international market into consideration, let’s look at Airbnb Inc. It is one of the top operators of the largest home-sharing service. It was planned to debut in the stock market this year and was searching for a great opportunity to begin the IPO process around March or April 2020. Now, some reports say that the kick-off could get pressed back, as visitors and businesses have canceled their travel plans around the globe. This causes a great of Airbnb’s plan to slip into the year 2021.
As we know that the uncertainty and fear, which has been sparked off in the financial markets by the coronavirus has also affected the primary market too. Most of the companies have put their Initial Public Offerings (IPOs) on the clutch. Some well-known companies have put their planned IPO on hold after a discussion with their financial advisers. The jumbo IPO of SBI card has noticed listless listing at a 13% discount to issue price of its IPO at Rs 755.
The espousal thing is that recently the script ended at Rs 678 only. This clearly means that the recently launched SBI Card IPO has also been affected much by the coronavirus impact. Most of the international companies have withdrawn their IPOs as the issue failed to receive a subscription. This situation has arrived for the first that where an Initial public offering becomes goes to unsubscribed. It is very difficult to say when the situation would become stable or improve the given prevalent fear in the stock market.
It is a fact that the IPO market will take some time to revitalize. The economic circumstance is very clear as there is no chance of enthusiasm. Investors who are willing to invest in IPO for the long term are in red, and it’s clear that they can’t bring money back in this crisis circumstance..
Huge Impact of Coronavirus on IPO
The Indian stock market or the primary markets are in the danger zone of pounding to a complete end for the 2020 IPO market. Over three dozen Indian companies have already deferred their public issue plans avoiding a prickly fall in the equity market as a resultant of the Covid-19 pandemic. It may take some time to return back to normal function. As per the financial advisors, the current scenario is very tough to predict demand and fix valuation in the stock market. All investors have to wait for the confidence to return to the share market.
As per calculations, around Rs.40,000 crore worth of public issues has been postponed which was planned to be launched within the last month of 2020, i.e., December 2020. Due to the current situation, there is an uncertainty of the market that when stability and growth will return. Capital markets are very flexible and unstable. Officials view it as very tough to launch IPOs in the present time, but after six to seven months, things maybe improve.
As we have read above that the primary market is already under pressure due to the slowdown in the economy resulting from vague coronavirus. The impact of Covid-19 has negatively affected the Indian IPO market. Sensex is falling over 23% each month, especially after February 2020. According to estimation, IPOs worth Rs 40,000 crore were about to hit the market this year between March and December, but the majority of the issues have been deferred due to the impact of coronavirus on Indian IPOs. But after some time, things will settle down, and every firm, government sector, and private companies will again start making profits.
No IPO found
|Issuer Company||Exchange||Issue Open|
|Yes Bank Ltd FPO||BSE, NSE||Jul 15, 2020|
|Rossari Biotech Ltd IPO||BSE, NSE||Jul 13, 2020|
|Reliance Industries Ltd. (RIL) Rights Issue||BSE, NSE|
|Antony Waste Handling Cell Ltd IPO||BSE, NSE||Mar 4, 2020|
|SBI Cards and Payment Services Ltd IPO||BSE, NSE||Mar 2, 2020|
|ITI Ltd FPO||BSE, NSE||Jan 24, 2020|
|Prince Pipes and Fittings Ltd IPO||BSE, NSE||Dec 18, 2019|
|Ujjivan Small Finance Bank Ltd IPO||BSE, NSE||Dec 2, 2019|
|CSB Bank Limited IPO||BSE, NSE||Nov 22, 2019|
|IRCTC Limited IPO||BSE, NSE||Sep 30, 2019|
|Issuer Company||Exchange||Issue Open|
|Billwin Industries Ltd IPO||BSE SME|
|Nirmitee Robotics India Ltd IPO||BSE SME||Mar 31, 2020|
|DJ Mediaprint & Logistics Ltd IPO||BSE SME||Mar 26, 2020|
|Laxmi Goldorna House Ltd IPO||NSE Emerge||Mar 20, 2020|
|Cospower Engineering Ltd IPO||BSE SME||Mar 17, 2020|
|RO Jewels Ltd IPO||BSE SME||Mar 12, 2020|
|SM Auto Stamping Ltd IPO||BSE SME||Mar 3, 2020|
|ICL Organic Dairy Products Ltd IPO||BSE SME||Jan 31, 2020|
|Chandra Bhagat Pharma Ltd IPO||BSE SME||Jan 31, 2020|
|Tranway Technologies Ltd IPO||BSE SME||Jan 27, 2020|