Artificial Rains in March
Phew! March is behind us. The market players must be breathing easy now. With 27 SME IPOs and 9 bigger ones, it was a busy period for all players of Primary Market in Indian stock exchanges. This rush happened despite the secondary market remaining rather subdued throughout the month caused by domestic and global headwinds.
Though not unexpected, the rains in Primary Market were intense this year. March and September usually does witness a spike in the monthly performance on the number of Offers. More out of accounting compulsions, such artificial rains does cause a bit of traffic jam, resulting in some casualties on the way. With 36 Issues opening in barely 20 working days, the investor has a lot to choose from. The investment banking teams, brokerages, bankers, R&T agencies, PR agencies are all under a fair bit of pressure in meeting deadlines. While the front-end of these stakeholders do not want an opportunity to miss, the pressure to perform at the back-end gets immense. The final performance of some of the mandates surely could have been better for some of IPOs on offer.
Not a great idea for a Company for whom an IPO is perhaps the single biggest event in their lifetime since their birth itself!
The rush in March 2018 can have an additional reason too. India has entered the 5th year of Union Government. The political noise in the year preceding Lok Sabha elections increases as we get near voting day. Corporate India chooses to take a back seat during last six months of the election year. With deafening political din and near policy-paralysis normally witnessed during such periods, no new adventure is initiated by a majority of corporates.
This year, it is expected that the political rains and thunder-showers will arrive earlier. Key state-government elections that are due in next 6-7 months are expected to predict the sentiment for the all-important Union Government elections in 2019. The political number crunching, strategies and counter-strategies are likely to start in May 2018 after elections in Karnataka. It is felt that India will only be playing politics in third and fourth quarter of her financial year.
Corporate India must have considered that as a bigger dampener to the investor sentiment than the traffic jams caused by artificial rains of March.