JM Financial Vice Chairman and MD Vishal Kampani has warned retail investors to avoid buying new shares on the day of listing. He says that the momentum seen in the initial days is sometimes misleading. Because at that time the supply of shares in the market is less.
While talking to CNBC-TV18, Kampani said, ‘There is no need to run on the first day. Give some time. He also added that retail investors would be better off investing with good mutual funds rather than trying to catch listing gains.
Supply will increase as soon as lock-in ends
Kampani says post-IPO bullishness is often seen because anchor investors have locked-in shares. But as soon as the lock-in period of 30 days, 90 days or 6 months ends, selling of shares increases and the market balance changes.
He said that you see the real picture when these lock-ups are released. Because private equity investors take exit on a large scale at this time.
Shares may remain flat for a long time
Kampani said that in the last few years, private equity investment of about 350-400 billion dollars has come into India. In his estimation, there will be exits ranging from $800 billion to $1 trillion in the coming 5-7 years. Out of this, about 25-30% will be in exit public markets, which will create huge supply.
For this reason, many times the shares of companies remain flat for two-three years, even if the company’s business is doing well. He said, ‘If 70% of the shares of a company are ready for sale, then the prices can remain stable for a long time.’
This round of IPO will continue
According to Kampani, this private equity is also the reason for the current IPO cycle. As the money from PE firms returns after exiting, it gets invested in new companies, and then they come into the IPO market. That means this cycle will continue and this round of listings will not end.
Slow pace due to weak earnings
Talking about the performance of the market, Kampani said that the index remained weak this year because the earnings of the companies were weaker than expected. Earnings growth in FY25 was only 8-9%, whereas expectations were 15-16%. Because of this, foreign investors sold.
He said consistent SIP inflows from retail investors played a big role in keeping the index stable. Otherwise the decline could have increased.
India’s macro fundamentals strong, no major threat
Kampani said that at present there is no major macro risk before India. He cited three reasons – companies’ balance sheets are strong, banks and NBFCs are in good shape, and India has forex reserves of about $700 billion.
He said that India’s long-term growth story is attracting foreign investors. He estimates that earnings growth in FY26-27 could be 14-16%, which will support market returns.
JM Financial’s largest IPO pipeline ever
Talking about future prospects, Kampani said that JM Financial has its largest IPO pipeline till date, with filed issues worth about Rs 1.2 lakh crore. He estimates that at this time deals worth Rs 3-4 lakh crore can come in the entire market. IPO fundraising this year has already crossed Rs 1.52 lakh crore, which is above last year’s level.
He also said that if some big IPOs come on time, the fundraising could double next year. Among these, the IPO of National Stock Exchange (NSE) is considered to be the biggest and most talked about. Kampani said, ‘This will be a very big and very exciting IPO.’
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