India's IPO market is currently experiencing a remarkable surge, positioning itself as a global leader despite a general downturn in initial public offerings worldwide. With the latest data revealing that India accounted for 27% of global IPOs in the first half of 2024, it's clear that the nation is defying the odds and setting new benchmarks in the financial landscape.
Others sink and India floats
While the EY Global IPO Trends Q2 2024 report indicates a 12% drop in global IPO volumes and a 16% decrease in proceeds, India's market is thriving. In fact, as of late September 2024, India has already surpassed its full-year record for funds raised through IPOs, totaling approximately ₹65,000 crore (around $8 billion) from 220 IPOs so far this year.
This explosive growth is largely driven by strong retail investor participation and an increasing number of small and medium enterprise (SME) listings.
Record breaking numbers
Since the pandemic-induced lockdown in 2020, India has witnessed 215 IPOs, with over 70% trading above their issue price as of July 2024. The first half of 2024 alone saw 76 mainboard listings, marking a staggering 111% increase from the previous year. The fourth quarter of 2024 is expected to be particularly vibrant, with 10 new IPOs launching next week, including notable names like Manba Finance and KRN Heat Exchanger.
In August 2024, IPO activity reached its highest level in over two years. Ten companies raised a combined total of ₹17,047 crore, marking the largest monthly haul since May 2022. Of this amount, a significant 57% (approximately ₹9,715 crores) came from fresh issue capital, while the remaining was through offer-for-sale (OFS) components.
Comparatively, only 20 IPOs raised slightly more than ₹15,051 crore during the same period last year. This year also saw an impressive 92 firms filing draft red herring prospectuses (DRHPs) with SEBI, indicating robust market interest.
Who's making headlines?
Several companies have made significant impacts this year. For instance:
- Ola Electric Mobility raised around ₹6,145 crore
- Brainbees Solutions secured approximately ₹4,193 crore
- Premier Energies garnered about ₹2,830 crore
Other notable mentions include Ceigall India and Bazaar Style Retail. Bajaj Housing Finance has also seen its value double to approximately $16 billion, making it one of the top debuts this year!
What’s attracting the investors?
The Indian IPO market's beauty lies in its rapid oversubscription rates and impressive listing-day returns. Many recent IPOs have been oversubscribed on their opening day due to high valuations in the secondary market. For example:
- Unicommerce eSolutions was subscribed at an astounding 168x
- Orient Technologies saw subscriptions at 155x
- Saraswati Saree Depot was oversubscribed by 108x
Additionally, some IPOs are trading at grey market premiums ranging from 20-100%, further fueling investor interest
The future is giving ‘rich’
With India's IPO market showing no signs of slowing down and a promising lineup for upcoming listings, investors are keenly watching this space. As companies prioritize financial sustainability and profitability, the landscape for public offerings appears more robust than ever.
Are you considering investing in any upcoming IPOs?
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