India’s IPO Surge: A Historic Month Ahead
India is poised to experience its busiest month for Initial Public Offerings (IPOs) in nearly three decades, with an impressive 25 companies expected to enter the mainboard segment in September. This surge, reminiscent of the last significant IPO wave in 1997 when 28 firms tapped the markets, is set to collectively raise over ₹12,000 crore. The current landscape indicates a vibrant and dynamic market, reflecting both investor confidence and a robust economic outlook.
A Broader IPO Landscape
The excitement surrounding IPOs is not confined to the mainboard segment; the smaller SME (Small and Medium Enterprises) segment is also witnessing a flurry of activity. Just this week, 28 IPOs have hit the market, with another 18 slated to open in the first two days of the upcoming week. This dual surge in both mainboard and SME offerings highlights a growing appetite for public investments across various sectors.
Mixed Demand Amidst Liquidity Concerns
While many IPOs are successfully navigating the market, the demand remains mixed. Subscription numbers have been moderate, likely influenced by a liquidity crunch stemming from the sheer volume of IPOs flooding the market. Investors are exercising caution, balancing their portfolios amid a landscape filled with new offerings.
Historically, the year-end rush for IPOs is not a new phenomenon. Last year, companies also sought to capitalize on public markets as the year drew to a close, albeit in smaller numbers. Firms typically aim to complete their fundraising efforts before the quarter ends, as delaying into October necessitates updating draft prospectuses with another round of audited earnings.
Factors Driving the IPO Boom
Analysts attribute the current IPO boom to several key factors: a robust business outlook, strong domestic liquidity, buoyant equity markets, and attractive valuations. Dharmesh Mehta, CEO at DAM Capital, notes that foreign investors have shown an increased appetite for Indian offerings, further bolstering market confidence. Despite being net sellers of approximately ₹1.8 lakh crore in the secondary market this year, foreign institutional investors (FIIs) have invested nearly ₹42,900 crore ($4.8 billion) into IPOs and qualified institutional placements. This contrast underscores a selective approach by FIIs, who are betting on fresh equity stories rather than the broader market.
The Outlook for India’s IPO Market
Looking ahead, India is expected to remain one of the world’s busiest destinations for IPOs. In 2024, companies raised over ₹1.5 lakh crore, and the momentum has continued into 2025, with ₹68,000 crore mobilized by August. Data from Prime Database reveals that issues worth ₹1.14 lakh crore have already received regulatory approval, while an additional ₹1.64 lakh crore worth are still pending.
Regulatory changes have played a significant role in this surge. The Securities and Exchange Board of India (SEBI) has implemented AI-driven document scanning to expedite approvals, shortening timelines and enabling issuers to seize favorable market conditions more efficiently.
Anticipated Big Names in the Queue
The upcoming IPO line-up features some of India’s most anticipated listings, including Tata Capital, LG Electronics India, NSE, Hero FinCorp, and a range of digital-first companies such as Groww, PhonePe, Meesho, Shadowfax, and WeWork India. These companies are set to capture investor interest and potentially reshape the market landscape.
Conclusion
As India gears up for a historic month of IPOs, the confluence of favorable economic conditions, regulatory support, and investor enthusiasm paints a promising picture for the future. With a diverse array of companies preparing to go public, the Indian IPO market is not just a reflection of current trends but a beacon of growth and opportunity in the global financial landscape.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own and do not represent the views of The Economic Times.)