Stronger H2 CY25 For IPO Market Is Anticipated

During the first half, 35 companies have been able to tap the market raising almost Rs 32,000 crore

Mahavir Lunawat, Managing Director, Pantomath Capital Advisors

Mahavir Lunawat,

Managing Director, 

Pantomath Capital Advisors 

Mumbai, July 6, 2024: 

India's robust economic foundation and bright growth prospects make it an excellent time for the country's thriving IPO market. We anticipate substantial investment in public markets and high demand for both new-age and conventional businesses in the near future.

During the first half, 35 companies from diverse sectors such as co-working space, furniture retailing, and online ticket booking have been able to tap the market raising almost Rs 32,000 crore.

A stronger H2 CY25 for the IPO market is anticipated, with increased activity, potentially larger deals, and new listings across diverse sectors. As always, thorough analysis of individual company fundamentals and future prospects remains crucial before making any investment decisions

Indian Market update:

The Indian market extended rally further as expected, with Nifty trading so far all-time high levels of around 24400.40 levels. The overall outlook for the market remains positive. On economic data front, The HSBC India Services PMI came around 60.5 in June 2024 quickening from May's five-month low of 60.2. This marked the 35th consecutive month of growth in services activity, supported by a faster rise in new orders, with an unprecedented expansion in foreign sales. India's HSBC Manufacturing PMI increased to 58.3 in June 2024, up from May's 57.5, reflecting robust demand driving expansions in new orders, output, and purchasing activity. GST collections for June surged 8% year-on-year to ₹1.74 lakh crore, up from ₹1.61 lakh crore. Auto sales in June reached 340,784 units, showing growth from 328,710 units in the previous year. IMD has revised the monsoon forecast for June to “below normal” from the earlier prediction of “normal” rainfall after the monsoon’s progress has stalled over the past few days. However, IMD also maintaining an "above normal" monsoon for July to September this year as predicted earlier, moving from El Niño to La Niña conditions. This expected increase in rainfall is crucial for agriculture, likely boosting crop yields, reducing food prices and supporting overall economic growth. The core sector, comprising eight major industries, grew 6.3% year-over-year in May, maintaining over 6% growth for the fourth consecutive month. However, election campaigns and heatwaves may have impacted project execution and input supply.

As expected, Telecom operators made Tariff hike post-election Results including Reliance Jio, Bharti Airtel, and Vodafone Idea, have raised tariffs to monetize 5G services, potentially improving sector financials.Experts believes tariff hikes are positive step and the sector could be ripe for Re-rating.  In the cement sector, major big players are expanding through inorganic acquisitions, expecting 6-7% compounded growth in the coming years, with top five players set to dominate over half the market by March 2025 as commented by experts and other Research agencies. Scorching summer heat and general elections made the April-June period a mixed-bag quarter for consumer goods, even as top industry executives said green shoots are becoming conspicuous in rural consumption. The share of Russian crude in Indian imports rose to 42% in June from 37% in May and was more than the combined share of the next four largest suppliers, according to energy cargo tracker Vortexa. Indian refiners find it attractive to buy Russian crude as it is available for a discount, which is around $3-4 per barrel on a delivered-at-port basis.

Global Market Update:

The US market extended further except for Dow jones so far for the week. All these indices are trading at all time high levels. Overall outlook for the US market remains positive. On economic data front, The Fed's preferred inflation measure (CPE) was virtually unchanged in May, paving the way for the Fed to cut rates this year. US GDP increased at an annual rate of 1.4 % in the first quarter of 2024 according to the "third" estimate. It’s showing sharp contraction in US economy compare to last quarter of CY2023. ISM Manufacturing PMI fell unexpectedly to 48.5 in June 2024 from 48.7 in May, below forecasts of 49.1, signalling continued weakness in demand and output decline for the third consecutive month. The ISM Services PMI in the US tumbled to 48.8 in June 2024, the sharpest contraction since April 2020. Markets were expecting 52.5 after 53.8 in May. The decrease in the composite index in June is a result of notably lower business activity, a contraction in new orders.

 The S&P Global US Services PMI rose to 55.3 in June of 2024 from 54.8 in the previous month, and firmly above the earlier market expectations of 53.7. The data contrasted slightly with recent indicators suggesting that economic activity in the US was moderating, adding leeway for the Fed to maintain rates at a restrictive territory if inflation does not slow. As per latest FOMC minutes of meetings, lowering the federal funds rate was deemed inappropriate without clear evidence of hitting the 2% inflation target. Chair Jerome Powell stressed the need for more definitive evidence before lowering rates, noting recent modest progress. US 10 year treasury yield currently around 4.36%.

Brent crude prices trading around $86 per barrel. It has extended on upside for the week amid a supply concern in near term. Geopolitical tensions in the Middle East after reports that Israel killed a senior Hezbollah commander, prompting Hezbollah to retaliate near the border. Additionally, Hurricane Beryl is anticipated to transition into a tropical storm in the Gulf of Mexico by Friday, threatening extraction activity for key producers. As mentioned earlier, it’s trading in the range with geopolitical tension and fear of economic slowdown worry


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