Should You Buy These IPOs From Big Companies

India’s primary markets are currently experiencing a significant surge, with numerous companies preparing to launch their IPOs in the upcoming months. After the landmark success of the Bajaj Housing Finance IPO, several listed firms are now looking to list their subsidiaries, capitalizing on the momentum in the Indian equity markets.

Amidst the buzz surrounding new-age companies, industries such as green energy, electric vehicles, and diversified financial services are preparing to make their debut on Dalal Street. While some companies have already filed their Draft Red Herring Prospectus (DRHP), others have received preliminary approvals from their boards to move forward with their IPOs.

There is also the possibility that some of these subsidiaries may reserve quotas for shareholders of the parent companies, giving them the opportunity to submit dual applications in the IPO. This prospect has piqued investor interest in the parent firms, as they closely monitor the progress leading up to the IPOs.

Experts believe that the current market climate presents a win-win scenario for both companies and investors. A thriving primary market offers investors the chance to participate in the company’s growth, while companies benefit from a more efficient and cost-effective way of raising capital.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, noted that many companies are eager to take advantage of the bullish sentiment in primary markets, seeking to raise capital from equity sources. This not only allows investors to join the journey of high-potential businesses but also helps companies avoid the challenges of raising and servicing debt.

Several companies are already preparing for their IPOs. NTPC has filed for a ₹10,000 crore IPO for NTPC Green, and HDFC Bank recently approved the sale of stakes in HDB Financial Services. Other notable names, such as Canara Robeco AMC, Hero Fincorp, and India First Life Insurance, are also lined up for their stock market debuts.

Market experts advise investors to evaluate the fundamentals of both the parent and subsidiary companies before making decisions. Understanding the business model and potential of listing-bound companies is crucial to making informed investment choices.