On Thursday, the Sensex and Nifty soared to record highs, largely driven by an unexpected surge linked to IPO activity, particularly the Bajaj Housing Finance IPO. Despite market struggles earlier in the day, a significant upmove began post 2 PM, attributed to the impact of several major IPOs.
IPO Impact on Market Liquidity
The Bajaj Housing Finance IPO attracted bids worth ₹3.24 lakh crore, with an initial target to raise ₹6,560 crore. Alongside, two other IPOs—Kross and Tollins Tyres—also saw high investor interest, collectively locking nearly ₹4 lakh crore of investor capital. According to the ASBA mechanism, funds for IPO applications are blocked in investor accounts until shares are allotted or released back into circulation.
Release of Blocked Capital
As IPO allotments closed and unallocated funds were released, the freed-up liquidity made its way back into the stock market. This influx of capital helped trigger a sharp upmove, lifting large-cap stocks and driving both Sensex and Nifty to new highs.
Key Stock Performers
The rally was fueled by significant gains in Reliance Industries, HDFC Bank, Bharti Airtel, Infosys, and SBI, which were among the top contributors to Nifty’s rise. By the end of the day, all 50 Nifty index constituents posted gains.
Weekly Expiry & Short Covering
Additionally, Thursday’s market boost coincided with the weekly expiry of Nifty 50 contracts. Once Nifty surpassed the 25,200 mark, short sellers scrambled to cover positions, further intensifying the upward momentum.
The combined effect of IPO liquidity and short covering contributed to a remarkable session for the markets, pushing Sensex and Nifty to record levels.
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