IPO fever subsides, index dips 4%

Mumbai: The BSE IPO Index of 43 companies listed recently after their initial public offerings fell 3.91 per cent compared to 0.41 per cent gain in the Sensex on Monday with only six of the 43 newly listed companies closing with gains.
The top losers included Zomato (-8.80 per cent), Macrotech Developers
(-4.92 per cent), Sona BLW Precision Forgings (-4.61 per cent), Angel Broking
(-9.48 per cent), Windlass Biotech (-7.05 per cent), and Krsnaa Diagnostics
(-4.32 per cent).

Zomato's market cap fell below the Rs 1-lakh crore mark to Rs 99,633.78 crore as the stock suffered its first major post listing volatility and touched an intraday low of Rs 124.90 on the BSE. Zomato finally closed at Rs 127 on the BSE.

With both the US Federal Reserve and Indian central bank hinting at withdrawal of easy money policy sooner than later, sentiments are turning cautious in the market. Investors have started booking profit in the recently listed IPOs and the listing premium has started vanishing too, said analysts.

RBI's minutes released last week reveal the balance tilting in favour of calibrated normalisation, which has started impacting primary markets.

"We believe the minutes of the 6 August Monetary Policy Committee meeting are hawkish at the margin. All members are in favour of leaving the policy repo rate unchanged, but one member believes that the reverse repo rate should be hiked immediately and two believe that other normalization can begin,” said brokerage firm Nomura.

"Froth is getting removed from the broader market and also from the IPO market,” said V. K. Vijayakumar of Geojit.