In the first half of the financial year 2023-24, India witnessed significant activity in the Initial Public Offering (IPO) market, with a total of Rs 26,000 crore raised. This marked a resurgence in IPOs, particularly in September, where Rs 12,000 crore was raised, accounting for nearly half of the first-half total.
Market Confidence and Q1 Earnings Boost
Experts attribute this boost to favorable market conditions and renewed confidence following a robust Q1 earnings season. While the fundraising in H1 FY24 was lower compared to H1 FY23 when Rs 36,000 crore was raised, marquee offerings by Life Insurance Corporation of India (Rs 21,008 crore) and Delhivery (Rs 5,235 crore) were prominent contributors.
Incentives for Small and Medium-sized Businesses
Investor confidence in the economy, healthy corporate earnings, and several factors, including investors seeking quick gains and rising risk appetite, have incentivized small and medium-sized businesses to enter the IPO market.
Quarterly Breakdown
The first quarter (April-June) saw IPOs totaling over Rs 7,400 crore, while the second quarter (July-September) witnessed a surge with IPOs totaling over Rs 18,800 crore.
Optimistic IPO Pipeline
The IPO pipeline remains robust, with approximately 30 entities receiving SEBI approval for IPOs totaling Rs 40,740 crore, and 38 entities with IPO sizes of Rs 43,659 crore awaiting approval after filing offer documents.
Election-related Uncertainty in Second Half
While the IPO market has been flourishing, there is anticipation of a potential slowdown in the second half due to upcoming elections. Some companies may postpone their IPO plans until after the elections to provide the market with the desired certainty.
Regulatory Scrutiny and IPO Approval
Regulatory scrutiny has increased as the market has experienced challenges with newly listed firms underperforming. As a result, companies with valid approvals or those awaiting approvals have had to re-file their papers.
Prominent Pending IPOs
Notable IPOs still awaiting approval include Oravel Stays, Go Digit, and depository NSDL, with estimated sizes of Rs 8,430 crore, Rs 3,500 crore, and Rs 4,500 crore, respectively. These IPOs are expected to contribute significantly to the future IPO landscape in India.
