NEW DELHI: Fundraising by way of IPOs in India hit one other landmark as financial development, favorable market situations and enhancements in the regulatory framework helped corporations increase a report Rs 1.6 lakh crore in 2024, whereas the pipeline for the following year holds out greater promise. This distinctive year not solely mirrored the arrogance of issuers but in addition highlighted traders’ eagerness to seize itemizing-day positive aspects or again corporations with sturdy lengthy-time period development potential.
The year was marked by Hyundai Motor India’s historic IPO, the biggest in the nation’s historical past, which raised Rs 27,870 crore.
Companies of various market capitalisations — giant, mid, and small — tapped into the IPO route in 2024, with the typical problem dimension rising considerably from Rs 867 crore in 2023 to over Rs 1,700 crore in 2024.
The distinctive vibrancy of the IPO market was evident, with December alone seeing a minimum of 15 launches.
“Rising retail participation, strong domestic inflows and active participation by FPIs (even though they have been net sellers in the secondary market), private capex increase and the government’s strategic focus on infrastructure and key sectors have collectively laid a strong foundation for the fundraising momentum. in India,” V Prashant RaoDirector & Head – ECM, Investment Banking at Anand Rathi Advisors, mentioned.
Fundraising momentum is predicted to speed up additional in the New Year, probably surpassing 2024’s report figures, market analysts mentioned.
“Based on the 75 IPO documents, which are at various stages of approval/ marketing and the deal pipelines, we expect issuance activity in 2025 to cross Rs 2.5 lakh crore,” Munish Aggarwal, Managing Director and Head of Equity Capital Markets at Equirus, mentioned.
The IPO pipeline for the following year is about to characteristic main choices, together with HDB Financial Services’ proposed Rs 12,500 crore problem, LG Electronics India’s Rs 15,000 crore public float, and Hexaware Technologies’ Rs 9,950 crore providing.
According to information obtainable with the exchanges, 90 maiden public points have been launched in 2024, collectively elevating Rs 1.6 lakh crore. This contains eight IPOs scheduled to conclude on December 23-24. Besides, the Rs 500-crore IPO of Unimech Aerospace and Manufacturing is slated to open on December 23.
Additionally, Vodafone Idea raised Rs 18,000 crore by way of a comply with-on public provide (FPO). About Rs 1.6 lakh crore raised in 2024 far exceeded Rs 49,436 crore garnered by 57 corporations by way of IPOs in 2023.
By comparability, 2021 noticed 63 corporations elevating Rs 1.2 lakh crore, marking one of the best IPO year in twenty years, pushed by considerable liquidity, elevated retail investor participation, and sustained euphoria in the first market.
The resurgence in exercise additionally prolonged to the SME section, the place a report 238 small and medium enterprises raised Rs 8,700 crore, almost doubling the Rs 4,686 crore raised in 2023, in accordance to the information supplied by primedatabase.com.
This development displays growing curiosity in SME public choices, though it comes with heightened dangers for retail traders.
In response, Sebi determined to introduce stricter regulatory frameworks, together with profitability necessities, a cap on the provide-for-sale (OFS) element and a “draw of lots” system for non-institutional traders (NIIs) to safeguard smaller traders.
Experts attributed this year’s strong IPO exercise to a secure financial atmosphere, coverage continuity on the central authorities degree, and broad-primarily based financial development.
“Stable economic environment, policy continuity at the central government level combined with broad-based growth have encouraged companies and investors to raise funds. Foreign portfolio investors have also been big buyers, especially in the larger IPOs,” mentioned Pranjal SrivastavaPartner-Investment Banking at Centrum Capital.
Several elements, together with non-public fairness exits, sponsor-pushed gross sales, and shifts in company funding methods, have additionally pushed the IPO exercise.
“The resurgence of manufacturing and increased private capital expenditure are key contributors as companies look to fund expansion and modernisation. Many businesses are also focusing on diversifying their funding sources by shifting from debt-heavy models to equity, ensuring stronger balance sheets and reduced leverage, ” mentioned Neha AgrawalMD & Head, Equity Capital Markets at JM Financial Institutional Securities.
Among the year’s largest major-board IPOs, Hyundai Motor India led the pack, elevating Rs 27,870 crore, adopted by swiggy (Rs 11,327 crore), NTPC Green Energy (Rs 10,000 crore), Bajaj Housing Finance (Rs 6,560 crore), and Ola Electric Mobility (Rs 6,145 crore).
In distinction, Vibhor Steel Tubes launched the smallest IPO, elevating simply Rs 72 crore, indicating the variety of corporations accessing the capital markets.
For corporations, going public gives essential funds for growth, working capital, and debt reimbursement whereas enhancing visibility and attracting new enterprise alternatives. IPOs additionally function an exit technique for lengthy-time period traders.
Interestingly, the IPO subscription ratios have been exceptionally excessive this year. Vibhor Steel Tubes noticed a powerful subscription of 320 instances, whereas different choices like KRN Heat Exchanger and Refrigeration, Manba Finance, and Gala Precision Engineering have been every subscribed over 200 instances.
Additionally, IPOs of corporations like One Mobikwik Systems, Unicommerce eSolutions, Diffusion Engineers, BLS E-Services, and Exicom Tele-Systems have been subscribed greater than 100 instances.
This sturdy demand translated into substantial itemizing positive aspects, with over 60 corporations delivering constructive returns on their debut day.
Vibhor Steel Tubes, BLS E-Services, Bajaj Housing Finance and KRN Heat Exchanger delivered greater than 100 per cent acquire, reflecting strong investor demand.
Meanwhile, India’s fairness markets additionally noticed report-breaking performances, with the NSE Nifty 50 reaching an all-time excessive of 26,216 factors on September 27 and the BSE Sensex peaking at 85,836 factors on September 26, supported by the nation’s strong financial development outlook.
