India’s IPO (Initial Public Offering) market is gearing up for a busy period, with 55 companies planning to raise over ₹68,000 crore. This comes as the dust settles after the recent elections, bringing stability and renewed investor confidence.
Recent IPO Activity and Future Plans
In this fiscal year alone, seven companies have already raised ₹19,455 crore through IPOs. Another five companies are expected to launch their IPOs in June. The past fiscal year saw 76 companies go public, collecting ₹61,922 crore, though this is less than the record ₹1.1 trillion raised by 53 companies in FY22.
Pranav Haldea, Managing Director of Prime Database Group, noted, “There was uncertainty around the elections, but now stability and optimism have returned, which is good for the IPO market. Domestic investor liquidity remains strong, and government signals about policy continuity have boosted market confidence. We expect significant deals across various sectors in the coming months.”
Regulatory Approvals and Investor Advice
The market regulator has already approved 17 companies to raise nearly ₹11,946 crore, with another 38 companies waiting to raise about ₹56,405 crore.
Anand Rathi, co-founder of Mira Money, emphasized the importance of management quality when investing in IPOs. He advises investors to look at the company’s management history, financial performance, and compliance record. Rathi predicts that e-commerce, manufacturing, and NBFC (Non-Banking Financial Companies) sectors will be particularly active in the upcoming IPOs.
Investor Response and Market Performance
Recent IPOs have seen strong investor interest. Data from Mint shows that the median subscription ratio for 459 IPOs since 2018-19 more than doubled to 44.4 times last fiscal, compared to 20.2 times in 2022-23. However, not all IPOs have performed well post-listing. Out of 121 IPOs listed in the last two years, a quarter are trading below their issue price, and another 24% are only trading 10-25% above their issue price.
Future Outlook
Experts believe that the Indian IPO market will continue to grow strongly in the coming years, driven by the country’s economic growth and a shift in global investor interest from China to India. Atul Parakh, CEO of Bigul, said, “Even with possible valuation adjustments due to the new government, there is a healthy pipeline of offerings. Sectors like e-commerce, traditional retail, infrastructure, and electric vehicles are expected to see major deals.”
Parakh also highlighted that “Ample liquidity and potential lower interest rates in the second half of 2024 support a positive outlook. However, regulatory measures to prevent aggressive pricing and ensure market stability are essential for sustainable growth.”
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