Why UBS India’s Anuj Kapoor Thinks 2021 Is Primed For IPOs
Mergers and acquisitions will continue because of pent-up demand, Anuj Kapoor, managing director of UBS India, says.
UBS India is confident that a “robust environment” for primary issuances is in place even as initial public offerings picked up pace only in the last quarter of the calendar year 2020.
“Over the last few months, investors have made money and hence the environment is quite conducive for primary issuances through IPOs,” Anuj Kapoor, managing director of UBS India, told BloombergQuint’s Niraj Shah in an interview. Investors will lap up these issuances leading to over-subscriptions, he said.
India, according to Kapoor, will double the amount of issuances from $4 billion a year ago amid an upcoming, over-subscribed IPO pipeline.
IRFC Ltd., Indigo Paints Ltd., Home First Finance Ltd. and Stove Kraft Ltd. have already debuted on the bourses in 2021, while RailTel Ltd. is open for subscription.
An IPO isn’t the endgame but the beginning of a company’s journey in the capital markets, Kapoor said, adding brands with ample consumer plays will find a home among investors.
Opportunities for technology companies, according to him, are limited, with IPOs of not more than $200 million. “[But] given the way Indian technology companies have matured, 2021 will offer a watershed moment,” he said. “My conviction in the technology sector not only comes through with proven business models but also because most companies have now broken even.”
Key highlights from the conversation:
- Mergers and acquisitions activity to continue because of pent-up demand.
- Inbound activity to be the dominant theme going forward outweighing outbound activity. That’s because Indian businesses will grab the opportunities offered by the domestic market, he said.
- While private equity is going to be a major player, technology, financial services, infrastructure and healthcare will continue to dominate the markets.
- Foreign direct investment flows to grow from $50 billion last year.
- Kapoor doesn’t see large deals being struck and thinks there will be a combination, with space and appetite for medium- to smaller-sized deals.
Watch the full interview here: