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The Tata Technologies IPO saw a subscription of 69.43 times by 7pm on Friday, attracting bids of ₹1.5 trillion. It was followed closely by Gandhar Oil Refinery (India) Ltd at 65.63 times and Flair Writing Industries Ltd at 49.28 times. Fedbank Financial Services saw a more modest reception at 2.2 times. Demand was led by qualified institutional bidders (QIBs), high networth individuals and retail investors and, in the case of Tata Technologies, also from shareholders of its parent Tata Motors Ltd.

Market veterans attributed the strong demand to the ongoing rally in mid-cap and small-cap stocks in the secondary markets, the quality of the companies, and the moderate offer prices.

“The response for at least two of the closing issues has been tremendous, and coincides with the second phase of the bull market, which also explains the ample liquidity sloshing around,” said veteran investor Ramesh Damani. Bull and bear markets coincide with economic cycles, with four phases of expansion, peak, contraction and trough.

The demand shows that shares of companies like Tata Technologies, Gandhar Oil and government-owned Indian Renewable Energy Development Agency (IREDA) Ltd would list above their IPO prices, Damani added. The IPO of IREDA closed on Thursday, witnessing an overall subscription of 38.8 times.

Mid-cap and small-cap stocks have raced past the benchmark Nifty index in the latest leg of the market rally that began on 20 March. While the Nifty has risen 16.5% to 19794.70 during the period, the Nifty Midcap 150 has surged 30.99% to 15673.50 and the Nifty Smallcap 250, 47.90% to 12984.95.

“The subscription in issues like Tata Technologies reflects the underlying bullishness in the mid-cap and small-cap segments of the market,” said Samir Arora, founder, Helios Capital. “The demand shows that handsome listing gains could be expected in these issues.”

An indication of this is the widening grey market premium (GMP), or the premium to the IPO price at which shares are traded in the unofficial market before listing on exchanges. When the Tata Technologies IPO opened on 22 September, the premium was ₹395, or 79% to the upper price band of ₹500 a share. At issue closing on 24 November, it had widened to ₹ 413 or 82.6%, according to a market participant who expects it to list at ₹913. Similarly, for Flair Writing, GMP expanded to ₹ 80 from ₹71 at issue opening, indicating an estimated listing of ₹384, or a 26% premium to the upper price level of ₹304.