Record-Breaking Year for IPOs and Investment Banking in India
The year 2024 has marked a significant milestone for India’s financial markets, with initial public offerings (IPOs) reaching an unprecedented total of $20.5 billion on Dalal Street. This remarkable figure represents a staggering 176% increase compared to 2023, driven by a robust 40% year-on-year rise in the number of IPOs. As a result, investment bankers in India are estimated to have earned approximately $1.3 billion in fees, reflecting the booming activity in the investment banking sector.
The Surge in IPOs
The surge in IPOs has positioned India as a formidable player in the global IPO landscape. According to data from LSEG, Indian IPO listings accounted for 18% of global IPO proceeds, placing India second only to the United States, which holds a 28% market share. This is a notable shift from 2023, where China led the market; it has now fallen to third place with a mere 7% market share. The momentum in the Indian IPO market is expected to continue into 2025, with a robust pipeline of upcoming listings.
Follow-on offerings have also played a crucial role in this growth, contributing to 71% of India’s overall equity capital markets (ECM) proceeds. These follow-on offerings raised $51.6 billion, marking a 94% increase from the previous year, with the number of such offerings growing by 45.3%. This trend underscores the increasing confidence of investors in the Indian market and the willingness of companies to tap into public capital.
Investment Banking Fees on the Rise
Investment banking fees in India saw a modest increase of 1% year-on-year in 2024. Kotak Mahindra Bank emerged as the leader in the investment banking fee ranking, amassing a total of $92.8 million, which accounts for 7.2% of India’s investment banking fee pool. This growth in fees is indicative of the heightened activity in both IPOs and follow-on offerings, as companies seek to leverage the favorable market conditions to raise capital.
Mergers and Acquisitions (M&A)
While the IPO market thrived, the M&A landscape in India experienced a busy year, with a record 2,756 announced transactions, reflecting a 3.3% increase from the previous year. However, the total deal value fell to a four-year low of $80.5 billion, down 11.4% from 2023. This decline in deal value can be attributed to a shift towards smaller and mid-market transactions, as companies navigate a more cautious economic environment.
The industrials sector led the way in deal-making, totaling $10.9 billion, although this represented a 22.8% decrease compared to the previous year. The healthcare sector, on the other hand, saw a significant uptick, with deal values reaching $9.8 billion, up 51.5% from 2023. Financial services rounded out the top three sectors, with a total deal value of $9.44 billion, although this was a substantial decline of 69% year-on-year.
Bond Offerings
In addition to IPOs and M&A activity, primary bond offerings from India-domiciled issuers raised $86.1 billion in 2024, remaining relatively stable compared to the previous year. The financial sector dominated the bond market, capturing an impressive 82.4% market share with proceeds of $70.9 billion, reflecting an 8.6% increase from the prior year. The energy and power sector followed, raising $5.9 billion, which represented a significant 68.6% increase. However, government and agency bond offerings saw a decline, totaling $3.3 billion, down 19.9% from the previous year.
Axis Bank led the rankings for India-issued bond underwriting, with proceeds amounting to $11.9 billion, securing a 13.8% market share. This highlights the bank’s strong position in the capital markets and its ability to facilitate significant bond transactions.
Conclusion
The financial landscape in India has experienced a transformative year in 2024, characterized by record-breaking IPOs, a bustling M&A environment, and stable bond offerings. As investment bankers celebrate their earnings and companies continue to seek capital through public markets, the outlook for 2025 remains optimistic. With a strong pipeline of IPOs and a resilient economy, India is poised to maintain its position as a key player in the global financial arena.