The Year of IPOs: 2024’s Remarkable Surge in India’s Equity Market
The year 2024 has been a watershed moment for India’s equity market, marking a significant resurgence in initial public offerings (IPOs). With a remarkable array of companies stepping into the public arena, including Hyundai Motors India, Bajaj Housing Finance, Swiggy, NTPC Green Energy, and OLA Electric, the fundraising landscape has transformed dramatically. As of now, equity fundraising via IPOs, qualified institutional placements (QIPs), and rights issues has surpassed the Rs 3 lakh crore mark, a staggering 64% increase from the previous record of Rs 1.88 lakh crore set in 2021.
Factors Driving the IPO Boom
The surge in fundraising can be attributed to a confluence of favorable macroeconomic conditions, a robust equity market, and heightened investor confidence. Pinak Bhattacharya, Head of Corporate Finance at IIFL Capital, notes that the current environment is characterized by stable policies and growth, which has encouraged companies to seek capital for expansion, deleveraging, and investment in growth opportunities. The IPOs are not merely about raising funds; they also reflect a strategic move towards monetizing existing stakes and preparing for future challenges.
Investment banker DAM Capital, under the leadership of dealmaker Dharmesh Mehta, has also made headlines by launching its maiden public issue this week. According to data compiled by Prime Database, around 90 companies have either raised or announced fundraising of Rs 1.62 lakh crore so far this year, which is 2.2 times higher than last year’s Rs 49,436 crore.
The Future of IPOs: 2025 and Beyond
As we look ahead, the momentum of India’s IPO boom is expected to continue into 2025. Major players like LG India and Flipkart are gearing up for their market debut. LG is reportedly considering a valuation of up to $15 billion for its Indian unit in a planned listing next year, while Flipkart, valued at $36 billion, is preparing for what could be the largest share issue by a new-economy company in India.
This anticipated IPO from Flipkart is particularly significant, as it underscores the maturation of India’s startup ecosystem, now recognized as the third largest globally. The Walmart-owned firm has already secured internal approvals to shift its domicile from Singapore to India, marking a crucial step toward its IPO.
In addition to new entrants, 2025 is poised to witness existing listed firms taking their subsidiaries public. Companies such as HDFC Bank, Hero MotoCorp, Reliance Industries, and others are planning listings that will allow for independent capital raising and provide investors with access to focused, growth-driven businesses.
Noteworthy IPOs and Developments
Recent weeks have seen a flurry of activity in the IPO space. Greaves Cotton’s board approved an IPO for its subsidiary, Greaves Electric Mobility, while HDB Financial Services filed a draft red herring prospectus for a Rs 12,500 crore IPO—potentially the largest offering in the non-banking financial company (NBFC) sector. Brigade Hotel Ventures and Hero FinCorp have also made strides toward their public issues, indicating a robust pipeline of upcoming offerings.
Moreover, Canara Bank has approved a 13% stake sale in its mutual fund arm, Canara Robeco, through a public offering. Prestige Estates Projects is set to list its hospitality business, and both Reliance Industries and Tata Motors are reportedly planning IPOs for their subsidiaries, Reliance Jio and Tata Passenger Electric Mobility, respectively.
The Potential for Record-Breaking IPOs
2024 saw Hyundai Motor India’s IPO of Rs 27,870 crore, which became the largest ever in India’s primary market, eclipsing LIC’s Rs 20,557 crore IPO in 2022. However, 2025 may witness an even larger offering. Billionaire Mukesh Ambani is targeting a Mumbai listing for his telecom business, Jio, which analysts value at over $100 billion. This IPO is anticipated to be a game-changer, potentially surpassing Hyundai’s record.
Ambani has not updated his IPO timelines since 2019, but sources indicate that Reliance has firmed up plans for the Jio IPO in 2025, believing it has achieved a stable business model and revenue stream. If successful, this IPO could redefine the landscape of Indian public offerings.
Conclusion
The IPO landscape in India is undergoing a transformative phase, with 2024 marking a significant uptick in activity and investor interest. As companies continue to leverage the favorable market conditions to raise capital, the trend is expected to persist into 2025 and beyond. With major players preparing for their market debut, the coming years could see unprecedented developments in India’s equity market, setting the stage for a new era of growth and investment opportunities.