Marketwatch: Uncut diamonds

While DLF and ICICI Bank may have dominated primary market headlines last week, the ones that have really gone on to list with spectacular gains are the likes of MIC Electronics and Nitin Fire, writes Udayan Mukherjee.

While DLF and ICICI Bank may have dominated primary market headlines last week, the ones that have really gone on to list with spectacular gains are the likes of MIC Electronics and Nitin Fire. In fact, if one looks back over the last 18 months, the real IPO (initial public offering) wealth creators have been from the mid-cap universe. Educomp did its issue at Rs 125 in January 2006 and the stock is at Rs 2,300 today, Everest Kanto's Rs 160 offering has soared to Rs 1,000 and ICRA's Rs 330 issue is now at Rs 900. All in a short span of time.

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My feeling is that this is just a teaser. Over the next couple of years some really wonderful companies will come and hit the market. That is the beauty of India. We have hundreds of exciting businesses run by superb entrepreneurs. As the secular bull market unfolds and more Indians and global investors pour money in, these entrepreneurs will tap the capital market for funds. Many of these IPOs will go on to become multi-baggers. For a discerning investor IPOs present enormous opportunities in the next few years. Observe how the smart money is already seeking jewels in the unlisted space. High net worth individuals, non-resident Indians and private equity funds want a piece of the action before the stock goes public. Also, after four years of a bull run, most good ideas in the listed space have been discovered and priced out. A fresh set of stocks with new themes and undiscovered prices could do the magic.

(The writer is Executive Editor, CNBC-TV 18)