As India eyes $4 billion worth IPOs in 2020, FIIs have pulled out over $3 billion in March alone

• India Inc had hoped to raise as much as $4 billion from the market this year. But FIIs have pulled out almost $3 billion in the last seven trading sessions.
• The biggest FII sell-off took place on March 9, when FIIs pulled out $950 million in a single day.
• Bearish market sentiment coupled with coronavirus fears could deliver a double whammy to companies planning their IPOs this year.

Bears have charged into stock markets and it looks like they are here to stay. Apart from eating up investor wealth, they will also topple the plans of India Inc which had lined up IPOs worth $4 billion this year.

An uncertain future, threat of coronavirus and FIIs leaving the market in droves is spoiling the great Indian IPO party of 2020.

Amongst some of the biggest IPOs lined up for 2020 are LIC, NSE and Bajaj Energy. While the SBI Cards IPO allotment has been done already, others are yet to be announced.

FIIs are leaving the Indian market in droves

Following the coronavirus scare, foreign institutional investors (FII) have pulled out over $3 billion from the Indian market in March alone, according to data obtained from the National Stock Exchange (NSE).

The biggest FII sell-off in the recent future took place on March 9 when the Sensex plunged by 1,941 points, which wiped off ₹7 lakh crore of investor wealth. FIIs pulled out ₹7,000 crore (approx. $950 million) out of the Indian market.

So far in March, FIIs have pulled out ₹24,305 crore (approx. $3.28 billion) during the seven days of trading. This includes the figures for March 12, when the Sensex plunged by up to 3,080 points which wiped off over ₹10 lakh crore of investor wealth.

Global slowdown, coronavirus concerns to blame

A continuing slowdown in the global markets and coronavirus concerns have combined to form a deadly cocktail for investors worldwide.

Global indices like S&P 500, S&P 100, GDOW, DOW and others have all fallen by nearly 20% in the last month, triggered by sell-offs due to concerns of coronavirus spiraling out of control.

The Indian government also announced a travel ban, preventing foreigners from visiting the country till April 15. That has further crashed airline, airport, hotel and retail stocks - troubling the markets which are already down with selloff in banking stocks.

Which IPOs could be affected?

While the SBI Cards IPO has been allotted already, investors could end up losing listing gains due to the negative market sentiment and coronavirus concerns.

Apart from this, here are some of the Indian IPOs that could run into trouble:

LIC

The LIC IPO is likely to be held in the second half of this year. It was touted to be the biggest companies in India in terms of market capitalization, competing with Reliance Industries, TCS and HDFC Bank.

NSE

India’s largest trading bourse, the National Stock Exchange (NSE) was also supposed to announce its IPO in 2020. NSE was barred by SEBI from raising capital for six months, which ended on October 31.

Bajaj Energy

Bajaj Energy is one of the biggest privately held thermal energy companies in India. The IPO size was fixed at ₹5,450 crore.

Home First Finance

Home First Finance Company (HFFC) is a mortgage financier for the affordable housing market. It received approval from SEBI to raise ₹1,500 crore from the market. The HFFC IPO is expected to be held later this year.

Burger King

Burger King, one of the fastest growing fast food chains in India, is all set to raise ₹1,000 crore later this year.

See also:

Reliance Industries logs worst fall in 10 years, as Sensex tanks over 2400 points

India has IPOs worth $5 billion lined up this year⁠— here’s a look at the top candidates

Sensex plunges by over 2,000 points wiping of Rs 8,000 crore investor wealth