Zerodha's Nithin Kamath says India's primary market is 'red hot'

Zerodha's Nithin Kamath asserts India's primary market remains "red hot" despite the broader equity market's lack of momentum. During a LinkedIn post, Kamath highlighted that the amount raised through IPOs, Offer for Sale (OFS), and Follow-on Public Offers (FPOs) this year is on track to match or exceed the levels of the past two years.

The surge is attributed to a strong pipeline of companies planning to go public. "While the broader markets have gone nowhere, the primary market (IPOs, OFS, and FPOs) is red hot. By capital raised, this year is already on track to match, if not surpass, the last two years. And there's a big pipeline of IPOs coming up (link in comments)," Kamath stated.

Zerodha has witnessed a significant increase in IPO applications, with users opening accounts specifically to participate in these offerings. However, strong demand does not always equate to strong returns for investors. Kamath cited listing data, noting that while 74-80% of IPOs opened above their issue price, 35% opened just 0-10% above and around 26% opened below.

He also emphasized that popular IPOs have lower odds of allotment for retail investors. The primary market is anticipated to stay active in the coming months, with companies like Jio Platforms, PhonePe, Razorpay, and NSE set to debut on the public market.