New Delhi: A Landmark Year for IPO Fundraising in India
The year 2024 has marked a significant milestone in the Indian financial landscape, particularly in the realm of Initial Public Offerings (IPOs). As the economy continues to grow, favorable market conditions and improvements in the regulatory framework have collectively enabled companies to raise a staggering ₹1.6 lakh crore through IPOs. This remarkable achievement not only underscores the confidence of issuers but also reflects the eagerness of investors to capitalize on listing-day gains and support companies with promising long-term growth potential.
Historic IPOs and Record Fundraising
One of the standout events of 2024 was the historic IPO of Hyundai Motor India, which became the largest in the country’s history by raising ₹27,870 crore. This monumental offering set the tone for a year characterized by robust fundraising activities across various sectors. Companies of all sizes—large, mid, and small—took advantage of the IPO route, with the average issue size soaring from ₹867 crore in 2023 to over ₹1,700 crore in 2024. This surge in average issue size indicates a growing confidence among companies to tap into the public markets for capital.
Vibrancy of the IPO Market
The vibrancy of the IPO market was particularly evident in December 2024, which alone witnessed at least 15 new launches. This flurry of activity not only highlights the increasing appetite for public offerings but also signals a broader trend of rising retail participation. Investors are becoming more engaged, eager to explore opportunities in the equity markets, which have shown resilience and potential for growth.
Factors Driving Fundraising Momentum
Several factors have contributed to this exceptional fundraising momentum in India. V Prashant Rao, head of ECM at Anand Rathi Advisors, pointed out that rising retail participation, strong domestic inflows, and active involvement by Foreign Portfolio Investors (FPIs) have played crucial roles. Despite FPIs being net sellers in the secondary market, their participation in the IPO space remains robust. Additionally, an increase in private capital expenditure and the government’s strategic focus on infrastructure and key sectors have created a conducive environment for fundraising.
Promising Outlook for 2025
Looking ahead, market analysts are optimistic about the fundraising landscape in 2025. Based on the 75 IPO documents currently at various stages of approval and marketing, Munish Aggarwal, head of equity capital markets at Equirus, anticipates that issuance activity could surpass ₹2.5 lakh crore. This projection is bolstered by a strong pipeline of major offerings, including HDB Financial Services’ proposed ₹12,500 crore issue, LG Electronics India’s ₹15,000 crore public float, and Hexaware Technologies’ ₹9,950 crore offering.
Conclusion
The IPO market in India has experienced a remarkable transformation in 2024, characterized by record fundraising figures and a diverse range of offerings. As companies continue to leverage the public markets for growth, the enthusiasm among investors remains palpable. With a promising pipeline for the upcoming year, the Indian IPO landscape is poised for further expansion, potentially setting new benchmarks in the years to come. The combination of economic growth, favorable market conditions, and a supportive regulatory framework will likely continue to drive this momentum, making India an attractive destination for both issuers and investors alike.