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Kotak Mahindra Capital Expects Surging IPO Market In Next Year

On Monday, investment bank Kotak Mahindra Capital Company (KMCC) said that we believe that 2021, will be seen as a recovering year. It believes the Initial Public Offering (IPO) market may sees heightened activity in 2021.

They said in their statement, IPO activity is expected to be ruled by the resilient sector such as new-era technology, healthcare, and consumer including recovering sector such as commercial real estate, hospitality and prominent sector such as banking, financial service and insurance (BFSI).

V Jayasankar, senior executive director and head ECM, KMCC, stated, “the outlook remains optimistic for the ECM business, we may continue to see buoyant IPO activity dominated by the resilient sector.”

Surging IPO is need of time as COVID-19 impacted the economy adversely not only in India but worldwide. We are looking more at investment, development, and growth which help businesses to recover from the pandemic losses.

The need for growth capital, deleveraging (reduction of debt) to support growth as well as helping to build a buffer capital to face challenges arising due to COVID-19 will see a  buoyant fundraising activity.

Building capital stocks reduce the debt of the nation and promote development activities to serve the nation better quality of services such as healthcare, consumer, and new-age technology.

The private sector investment bank Kotak Mahindra Capital shows hope and believe the market could witness more Real Estate Initial Public Offering (REIT IPO) and qualified institutional placement. The robust IPO pipelines are expected to remain due to ample liquidity, and many unlisted companies have started building relationships with investment bankers in the hope of getting listed earlier than previously envisaged.

In the year 2019 IPO volume was Rs.20,300 crore which jumped to Rs. 45,000 crore in the year 2020.  It was recorded 2.25 times than the earlier volume. Surging IPO and QIP fund-raising helped the overall market activity to double its volume.


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