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The bumper stock market debut of Zomato Ltd capped a year of strong listings undeterred by the devastating pandemic that crimped economic activity and left many jobless.

Shares of Zomato, the first major new-age Indian technology firm, made a stellar market debut on Friday. This followed the more than 40 times subscription of the company’s 9,375 crore initial public offering.

As many as 10 companies saw investor wealth double since their listings in the past year.

A gush of global liquidity and a fast-expanding base of retail investors have resulted in IPOs in the past 12 months dominate the list of India’s most successful public listings in 15 years. Domestic investors opened a record 14.2 million new demat accounts in FY21, a nearly threefold rise from the previous year’s 4.9 million, according to data from the National Securities Depository and Central Depository Services. The average age of a demat holder has also come down from 34 years in Q1FY20 to 29 years in Q1FY22, according to Angel Broking.

Data from corporate database Capitaline showed that among the top 10 IPOs that gave the most returns on debut, four comprising Happiest Minds, Burger King India, GR Infraproject and Chemcon Speciality Chemicals hit the market in the past year. Shares of all the 10 companies doubled in value during intraday trading on their market debut.

“What’s driving the premium on a listing day is the recent stellar market performance and euphoria in the markets as there has been an influx of liquidity and new entrants in the markets," brokerage JST Investment said in an emailed comment.

Analysts, meanwhile, are dismissing suggestions that the market has entered a bubble phase and instead expect retail participation to continue while global liquidity flows will likely continue for some time.

As many as 10 companies saw investor wealth double since their listings in the past year.
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As many as 10 companies saw investor wealth double since their listings in the past year.

“Whether the overheated primary market is a bubble or not will only be proven till we have few poor listing gains and the secondary markets witness some healthy correction," brokerage firm Reliance Securities said.

The Street is hoping for further liquidity inflows, with media reports suggesting recently that the Pension Fund Regulatory and Development Authority is mulling allowing pension funds to broaden their investment spectrum and invest in eligible IPOs and similar primary issues with certain predefined criteria.

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