Jio, NSE among a few large IPOs to win from Sebi’s Relaxed Parliament Member Standards: Pranav Haldea

The Securities and Exchange Board of India’s (SEBI) recently drifted consultancy on the relief of the minimum public shareholders (MPS) -standard only a limited impact on the IPO market of India, according to Pranav Haldea, managing director of Prime Database Group.

Speaking with et now, Haldea said that although the proposed relaxation could benefit a few large upcoming listed IPOs such as Jio and NSE, the total number of companies that meet the revised market cap threshold remains small.

“There would probably be around 10 companies in the current market that are eligible according to these relaxed rules. Even in the pipeline, very few large IPOs would meet these criteria. So the overall impact will be limited,” Haldea noted.

Primary versus secondary market liquidity

By preventing a long -term view that primary markets drain the liquidity of secondary markets, Haldea emphasized that the opposite trend have shown the last five years.

“Post-Covid we witnessed an important meeting in the secondary markets, while we also see record issues in the primary market. The data prove that both can run parallel, on condition that there is good quality for attractive ratings,” he added.

Technical IPOs and appreciation problems

With various large technical IPOs prepared in the next 12-18 months, analysts have expressed concern about expensive valuations. Haldea, however, took a wider opinion. “As long as an IPO is completely subscribed, it shows that there was sufficient demand compared to that price. Once stated, the company becomes like any other shares, and the price depends on Fundamentals, Sectortrends and Macro -economic conditions,” he said.

He also reminded investors that IPOs are a stock product and cannot be expected to always generate positive returns immediately or forever. With reference to Dmart and IRCTC as examples, he noticed how the first concerns about valuations ultimately made way for long -term outperformance.

Strategy for emennin: balance prices and market sentiment balance

Haldea emphasized that issuers and investment bankers should praise IPOs realistically to guarantee the demand. “No issue wants an IPO to fail. We have actually seen many companies that cancel Sebi approval instead of launching valuations under their expectations,” he said.

Outlook for IPO market

Although Sebi’s proposed relaxation of the standards for public shareholders can benefit a handful of mega sposing, Haldea is of the opinion that the larger growth story of the IPO market of India will continue to depend on the fundamentals of the sector, the sentiment of the investors and the price discipline.