With economic growth, favorable market conditions and improving regulatory framework, companies to raise record Rs 1,600 crore in 2024, with even bigger expectations in the pipeline for next year, IPO financing in India was a new milestone.
This exceptional year not only reflected issuer confidence, but also highlighted investors’ eagerness to capture day-of-listing returns and back companies with strong long-term growth potential.
The year was marked by the historic IPO of Hyundai Motor India, which raised Rs 27,870 crore, the largest in the country’s history.
Companies of various market capitalizations, including large, medium and small companies, will enter the IPO route in 2024, and the average issue size will significantly increase from Rs 867 million in 2023 to over Rs 170 billion in 2024. increased to.
The extraordinary vigor of the IPO market is evident, with at least 15 initial public offerings taking place in December alone.
“Increased retail participation, domestic capital inflows, active participation by FPIs (despite being net sellers in the secondary market), increased private capital investment, strategic government focus on infrastructure and key sectors. The focus has collectively laid a strong foundation for fundraising momentum in India,” said V. Prashant Rao, Director, Investment Banking and Head of ECM, Anand Rati Advisors.
Market analysts say fundraising momentum could accelerate further in the new year, surpassing the record high set for 2024.
“Based on 75 IPO documents at various stages of approval/marketing and deal pipeline, issuance activity is expected to be over Rs 2,500 crore in 2025,” Managing Director and Head of Equity Capital Markets, Equirus said Munish Agarwal. Said.
Next year’s IPO pipeline includes HDB Financial Services’ proposed Rs 12,500-crore issue, LG Electronics India’s Rs 15,000-crore public offering and Hexaware Technologies’ Rs 9,950-crore issue. It will include major products.
According to data available with the exchange, 90 debut issues were issued in 2024, raising a total of Rs 1,600 crore. This includes eight IPOs scheduled to close between December 23-24. Additionally, Unimech Aerospace and Manufacturing’s Rs 5,000-crore IPO is scheduled to open on December 23.
Further, Vodafone Idea raised Rs 18,000 crore through a subsequent public offering (FPO).
The approximately Rs 1,600 crore raised in 2024 was much higher than the Rs 49,436 million raised by 57 companies through IPOs in 2023.
By comparison, 2021 was the best year for IPOs in the past two decades, with 63 companies raising Rs 1,200 crore, driven by ample liquidity, increased retail investor participation and sustained euphoria in the primary market. It became.
The resurgence in activity extends to the SME sector as well, with a record 238 SMEs raising Rs 8.7 billion, almost double the total raised of Rs 4,686 million in 2023, according to data provided by primedatabase.Com. It has doubled.
This growth reflects increased interest in small and medium-sized enterprises going public, but it comes with increased risk for retail investors.
In response, Sebi has introduced stricter regulations to protect small investors, including profitability requirements, caps on offer for sale (OFS) elements and a ‘lottery’ system for non-institutional investors (NII). It was decided to introduce a regulatory framework.
Experts attribute this year’s strong IPO activity to a stable economic environment, continued policy at the central government level and broad-based economic growth.
“A stable economic environment, continued policy at the central government level and widespread growth are encouraging companies and investors to raise capital. Foreign portfolio investors are also big buyers, especially for large IPOs.” said Pranjal Srivastava of Partner Investments. Centrum Capital’s banking operations.
Several factors, such as private equity withdrawal, sponsor-led sales, and changes in corporate financing strategies, also drove IPO activity.
“A resurgence in manufacturing and increased private capital investment are key drivers as companies look to expand and modernize.Many companies are also transitioning from debt-heavy models to equity and building stronger We are also focusing on diversifying our funding sources by ensuring balance sheet and leverage reduction,” said Neha Agrawal, Head – Equity Capital Markets and MD, JM Financial Institutional Securities.
Among the biggest mainboard IPOs this year, Hyundai Motor India leads the pack by raising Rs 27,870 crore, followed by Swiggy (Rs 11,327 crore) and NTPC Green Energy (Rs 11,327 crore). followed by Bajaj Housing Finance (Rs 6.56 billion) and Ola. Electric mobility (Rs 6,145 million).
In contrast, Vibhor Steel Tubes launched the smallest IPO, raising just Rs 72 million, demonstrating the diversity of companies accessing the capital markets.
For companies, going public increases public profile and attracts new business opportunities, while providing critical funding for business expansion, working capital, and debt repayments. IPOs also serve as an exit strategy for long-term investors.
Interestingly, IPO subscription rates are very high this year. Vibhor Steel Tubes received an impressive 320 subscriptions, while other products such as KRN Heat Exchanger and Refrigeration, Mamba Finance, and Gala Precision Engineering received more than 200 subscriptions each.
Additionally, companies such as One Mobikwik Systems, Unicommerce eSolutions, Diffusion Engineers, BLS E-Services, and Exicom Tele-Systems received over 100 applications for IPO.
This strong demand led to significant listing gains, with more than 60 companies posting positive returns on their first day of listing.
Vibhor Steel Tubes, BLS E-Services, Bajaj Housing Finance and KRN Heat Exchanger posted returns of over 100% reflecting strong investor demand.
Meanwhile, the Indian stock market also saw record performance, with the NSE Nifty 50 reaching an all-time high of 26,216 points on September 27 and the BSE Sensex peaking at 85,836 points on September 26, reflecting the country’s solid performance. was supported by strong economic growth prospects.
