It's raining initial public offers (IPOs) on Dalal Street, but investors are not as enthused as they were until recently. That at a time when the Indian capital market has broken a series of records in the past few months, with headline indices roaring to unprecedented levels, and counting.

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Barring FSN E-Commerce Ventures -- the parent of Nykaa, Latent View Analytics and Sigachi Industries, whose IPOs saw subscriptions of 82-327 times, most other primary market offerings in Q3 have not been able to tap the best of investor excitement though fully subscribed. The IPO of Latent View Analytics is the most subscribed IPO of 2021, surpassing the likes of Paras Defence, MTAR Tech, Tatva Chintan and Nazara Tech.

The biggest IPO of the country of all time, of One97 Communications -- the parent of Paytm, saw subscription of barely two times, with the portion reserved for retail investors attracting bids for 1.7 times the shares on offer.

Paytm's IPO, which surpassed the likes of Coal India, Reliance Power, GIC, New India Assurance and DLF in size, was among the worst this year in terms of subscription.

FSN E-Commerce Ventures -- the parent of Nykaa -- made a blockbuster debut in the secondary market last week, making entry into the top 10 club of listings this year. Sigachi's secondary market debut was the best so far in 2021, with shares commanding a premium of around 250 percent over the issue price. (Check out the complete list of top debutants this year)

Is it a good time to chase IPOs now?

The Street is divided over the IPO market at this juncture, with most looking to avoid sky-high valuations though some believe there are pockets of opportunities.

Legendary investor Rakesh Jhunjhunwala -- the Big Bull -- has no interest in IPOs at high valuations but "loves and respects the dedication, the speed with which new-age companies are working", he said in an exclusive interaction with CNBC-TV18 recently.

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Many others on Dalal Street are not big fans of expensively priced IPOs now. "An IPO is anybody's guesswork; it depends on pricing which we know only when an issue hits the road," AK Prabhakar, Head of Research at IDBI Capital, told CNBCTV18.com.

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Among the primary market-pessimists is AK Prabhakar. "An IPO is anybody's guesswork; it depends on pricing which we know only when an issue hits the road," Prabhakar, Head of Research at IDBI Capital, told CNBCTV18.com.

"I am better off buying a stock after 1-2 years of listing," he said, preferring to stay away from the primary market for now.

Is listing gain reason enough?

Investors should not take a myopic view on an IPO by purely eyeing the listing gain. That is the message from Jyoti Roy, DVP-Equity Strategist at Angel One.

"Listing gains are to some extent a function of market conditions. We believe investors should take a longer-term view on the companies, and should only apply for IPOs of those with sound business models and strong growth prospects," he told CNBCTV18.com.

Angel One recommended subscribing to Paytm and Sapphire IPOs, citing both companies' positive fundamentals and good long-term potential.

Roy is among the optimists. He expects renewed enthusiasm in domestic IPOs given the strong response of investors to the issues of Nykaa and PolicyBazaar. "We expect continued improvement in investor sentiments given the strong rebound in the economy, which will help drive earnings growth. As a result, we expect markets to do well which will also help go a long way in reviving investor sentiments towards IPOs," he said.

The year of IPOs

The recent IPOs are not even close to some of the most chased IPOs so far in 2021. Out of the more than 40 IPOs, 11 have been received by investors in a big way, attracting subscriptions to the tune of 100-300 times.

These are: Paras Defence, MTAR Technologies, Tatva Chintan, Nazara, Easy Trip, Rolex Rings, Shyam Metalics, Indigo Paints, Devyani, Laxmi Organic and GR Infraprojects.

Neha Khanna, Director of ValPro, believes Sapphire has better prospects than Paytm from a listing gain perspective.

The long-term viability of Sapphire is better, she said.

(Edited by : Abhishek Jha)

First Published:Nov 13, 2021 8:55 AM IST