A surge in the secondary stock markets has rubbed off on the primary market, with 10 public issues that came out to capitalise on the boom and raise R3,455 crore during the week witnessing a strong investor response. But experts caution that this should not be taken as an indication that the primary market has revived.
Seven out of the 10 initial public offers (IPOs) that have closed for subscription got fully subscribed and Career Point, an education service provider that sought to raise R115, saw its issue subscribed 47.4 times.
Movie business firm Eros International that was in the market to raise R350 crore also saw its issue subscribed 26.5 times.
Not only did the qualified institutional buyers come in big numbers, but the retail portion of the issues also witnessed strong response. Career Point and Eros saw the retail portion of the issue oversubscribed 32 and 12 times, respectively.
Experts, however, hold their reservations.
"These are small issues and they have been supported by a strong secondary market movement," said Prithvi Haldea, chairman and managing director, Prime Database. "Once the large issues hit the market and witness good investor response, we would say that there is genuine interest from investors into the primary market."
Good listings of some public issues in the recent past have also helped these issues get a good response, as investors are looking for some post-listing gains, said a market expert.