The National Stock Exchange (NSE) saw the listing of five initial public offerings (IPO) this week, including the much awaited Tata Technologies IPO. The hassle-free listing of all the issues during the mega IPO week left Zerodha co-founder Nithin Kamath impressed.
Nithin Kamath took to X (formerly Twitter) to talk about how massive activity erupted on the IPO market after a long time, with IPOs worth ₹7,600 crore making a splash on the NSE.
Kamath said, “After a long time, we have had massive activity in the IPO market, with ₹2.6lk cr blocked in bank accounts for IPOs worth ₹7.6k cr. If this was 2003, it would take 16 working days (or ~1 month), and the entire money would have moved to investment bankers and cost investors (an interest forego) at least 0.5% (assuming 6% pa) or ₹1300 crores.”
Kamath further pointed out the significant reduction in the IPO listing time as compared to two decades ago. He wrote, “T+16 became T+12, T+6, and from Sep 2023 it is T+3 (~1week). Now, the money never leaves the bank account until allotment. While institutional investors might miss out on interest income with money blocked in current bank accounts which don’t yield any interest for those 3 days, retail investors continue to earn the interest from their savings accounts during the IPO process.”
For the unversed, the T+3 timeline is the time set by SEBI in its new regulations, in effect from September. It states that all the IPOs need to be listed within three working days from the closure of the bid.
The Zerodha CEO further added, “In almost every aspect, capital market regulations in India have improved phenomenally over the last 20 years, especially in the last five years.”
IPO week on the stock market
The Tata Group launched its first IPO in 20 years this week – Tata Technologies IPO – making it one of the most awaited issue of the year. Apart from Tata, the four other IPOs launched this week were Gandhar Oil Refineries Ltd., Fedbank Financial Services Ltd., Flair Writing Industries Ltd, and Indian Renewable Energy Development Agency (IREDA).
Investors ended up placing bids worth ₹2.59 lakh crore on the stock market this week, while the overall IPOs were worth around ₹7,600 crore.