Record Fundraising Through IPOs: A Promising Outlook for 2025
In 2024, India witnessed an unprecedented surge in fundraising through Initial Public Offerings (IPOs), with a record amount of Rs 1.3 lakh crore raised. This remarkable achievement has set the stage for an even more ambitious target in 2025, as analysts predict that the primary market could exceed Rs 2 lakh crore in fundraising. According to Pantomath Capital, a wave of companies is already positioned with approvals from the Securities and Exchange Board of India (Sebi), indicating a robust pipeline for the upcoming year.
Current Landscape of IPO Approvals
As of now, approximately 34 companies have received Sebi approvals to raise around Rs 41,462 crore. Additionally, 55 other companies are awaiting clearance for a substantial Rs 98,672 crore. This growing interest in the IPO market is further evidenced by the filing of 143 Draft Red Herring Prospectuses (DRHPs) in 2024, a significant increase from 84 in 2023 and 89 in 2022. This trend suggests a vibrant and expanding primary market, with many companies eager to tap into public funding.
Factors Driving the IPO Boom
Several factors contribute to this bullish outlook for the IPO market. The favorable regulatory environment, combined with a strong investor appetite for new public offerings, has positioned India as a global leader in IPO volume. In fact, India hosted twice as many IPOs as the United States and 2.5 times more than Europe in 2024. This impressive performance underscores the resilience of India’s capital markets and the confidence investors have in the country’s economic prospects.
Mahavir Lunawat, Managing Director of Pantomath, emphasized the significance of this momentum, stating, “With the continued momentum in the markets, we now project that equity raised through IPOs will cross Rs 2 lakh crore in 2025. This milestone is a testament to the resilience of India’s capital markets, the confidence of investors, and the critical role IPOs play in fueling economic growth.”
The Role of Multinational Corporations
The participation of multinational corporations in the Indian IPO market has also been noteworthy. These companies recognize the strategic advantages of listing in India, including reduced capital costs and access to a vast consumer market. The robust regulatory framework further encourages global players to consider Indian markets for their equity offerings. This trend not only enhances the credibility of the Indian market but also attracts foreign investment, contributing to overall economic growth.
Anticipated IPOs in 2025
Looking ahead, several high-profile public offerings are on the horizon for 2025. Companies like LG, the National Stock Exchange (NSE), Oyo, Tata Capital, Zepto, Ather Energy, and NSDL are generating significant buzz among investors. Notably, Tata Group has already initiated preparations for a $2 billion IPO of Tata Capital, engaging with investment bankers to kickstart the process. This proactive approach reflects the conglomerate’s commitment to leveraging the favorable market conditions.
Similarly, Zepto, a quick commerce company, has expressed its ambition to become a fully Indian-owned entity and achieve profitability, positioning itself for a potential IPO in 2025. This optimism is indicative of the broader trend among startups and established companies alike, as they seek to capitalize on the growing investor interest in the Indian market.
Conclusion
The outlook for India’s IPO market in 2025 is not just optimistic; it is poised for significant growth. With a strong pipeline of companies ready to enter the market and a favorable regulatory environment, the stage is set for a record-breaking year. As investor confidence continues to rise, and with multinational corporations recognizing the advantages of listing in India, the primary market is likely to flourish. The anticipated fundraising exceeding Rs 2 lakh crore will not only reflect the health of India’s capital markets but also play a crucial role in driving the country’s economic growth forward.