Record-Breaking IPO Fundraising in India: A 2024 Overview
In 2024, India witnessed a remarkable surge in fundraising through Initial Public Offerings (IPOs), reaching an unprecedented Rs 1.6 lakh crore. This milestone was driven by a combination of robust economic growth, favorable market conditions, and significant enhancements in the regulatory framework. The IPO landscape in India has transformed, reflecting a vibrant market that is attracting a diverse range of companies.
Economic Growth and Market Conditions
The Indian economy has shown resilience and growth, creating a conducive environment for companies to go public. The favorable market conditions, characterized by increased investor confidence and a stable economic outlook, have encouraged businesses of all sizes to tap into the IPO route. The average issue size saw a substantial increase from Rs 867 crore in 2023 to over Rs 1,700 crore in 2024, indicating a growing appetite for larger capital raises.
Landmark IPOs of 2024
Among the standout performances in 2024 was Hyundai Motor India, which launched a landmark IPO raising Rs 27,870 crore, marking the largest IPO in the country’s history. This was followed by significant offerings from 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). These large-scale IPOs not only highlight the confidence of issuers but also the strong demand from investors.
Conversely, the diversity of the IPO market was illustrated by Vibhor Steel Tubes, which raised a modest Rs 72 crore, showcasing that even smaller firms are finding opportunities to access capital markets.
Factors Driving IPO Success
Several factors contributed to the robust fundraising activity in 2024. Rising retail participation and strong domestic inflows played a crucial role, alongside active involvement from foreign institutional investors (FIIs). Despite some fluctuations in the secondary market, FIIs remained key players in the success of large IPOs. Additionally, the government’s strategic focus on infrastructure and key sectors, coupled with an increase in private capital expenditure, has laid a solid foundation for continued momentum in the IPO market.
V Prashant Rao, Director & Head – ECM, Investment Banking at Anand Rathi Advisors, noted that the combination of these elements has created a favorable environment for fundraising, indicating a shift towards equity funding as companies aim to strengthen their balance sheets.
Looking Ahead: Promising Prospects for 2025
As 2024 draws to a close, analysts are optimistic about the IPO landscape in 2025, predicting that activity could surpass Rs 2.5 lakh crore. Major upcoming offerings include HDB Financial Services’ Rs 12,500 crore issue and LG Electronics India’s Rs 15,000 crore IPO, alongside Hexaware Technologies’ Rs 9,950 crore offering. The IPO pipeline appears robust, suggesting that the market’s vibrancy will continue into the new year.
The SME segment also saw significant activity, with a record 238 firms raising Rs 8,700 crore, highlighting the growing interest in smaller public offerings. This trend reflects a broader acceptance of equity financing across various sectors, further diversifying the IPO landscape.
Conclusion: A New Era for Indian IPOs
The exceptional IPO activity in 2024 has not only surpassed the previous record of Rs 1.2 lakh crore raised in 2021 but has also set a new benchmark for the Indian capital markets. With strong investor participation and favorable market fundamentals, the outlook for 2025 remains positive. As companies increasingly turn to equity funding, the Indian IPO market is poised for continued growth, reinforcing its position as a vital component of the country’s economic landscape.
In summary, the record-breaking fundraising through IPOs in 2024 marks a significant milestone for India, driven by a combination of economic resilience, favorable market conditions, and a diverse range of companies seeking to capitalize on the opportunities presented by the equity capital markets.