Indian IPO market in its golden age, poised for further expansion: ACMIIL

The Indian IPO market is experiencing a golden age. Driven by a robust domestic economy and high investor confidence, it has become a launchpad for ambitious companies and a lucrative opportunity for eager investors.

This thriving activity is characterised by a substantial increase in the number of companies seeking to list their shares on the stock exchange, along with a corresponding rise in capital raised. This trend signifies a period of robustness and dynamism within the Indian financial landscape.

In the first half of the current calendar year, 35 companies from the mainboard segment have raised around ₹32,000 crore and were subscribed on average 61 times. These companies were from diverse sectors like co-working spaces, furniture retailing, and online ticket booking.

This period has remained action-packed for the new-age tech startups aiming to get listed on the Indian stock exchanges. Go Digit, Awfis, and TBO Tek made the headlines for their stock market debuts. From what the trends suggest, this is just the beginning of significant momentum that's impending in the tech startup IPO space in the months to come.

The country is expected to witness some of the most noteworthy new-age tech IPOs this year, with the likes of Swiggy, Ola Electric, FirstCry, Ola Cabs, PayU, and MobiKwik forming a beeline for the Indian bourses, said domestic brokerage firm Asit C Mehta Investment Intermediates Limited (ACMIIL) in its latest report. 

Retail investors are driving the rally

Retail investors, buoyed by a strong secondary market and easy access through online platforms, are actively subscribing to offerings, often leading to significant oversubscription, ACMIL noted.

This trend shows that domestic investors remain bullish on India's solid growth story amid the prospects of policy continuity, pro-growth government measures, benign inflation, and the start of the interest rate cut cycle.

The brokerage pointed out that the country's strong macro environment has raised investor confidence, and the healthy performance of several new stocks in the last couple of years has also lured investors into investing in new IPOs.

New funding frontier for global corporations

The Indian capital market is emerging as a prime destination for global corporations seeking public listings. Hyundai India plans to raise $3 billion through its IPO, potentially becoming India's largest at a valuation of up to $30 billion. Similarly, LG is also preparing for a public listing in India, along with several other international companies.

The brokerage noted that the proposed IPOs of Hyundai India and LG could set a precedent for many more multinational companies with significant market shares in India that are still unlisted to consider listing in the Indian markets.

Way forward

The recently concluded elections are expected to boost the second half of CY25 market activity. Improved market sentiment and a potentially stable economic environment encourage companies to launch their public offerings.

Additionally, the brokerage anticipates that the success of several listings in the first half of CY25 could further drive momentum.

"Overall, a stronger CY25 for the IPO market is anticipated, with increased activity, potentially larger deals, and new listings across diverse sectors. As always, a thorough analysis of individual company fundamentals and future prospects remains crucial before making any investment decisions," said ACMIL.

India's primary market will be abuzz with activity over the next few months, with 55 companies planning to raise over ₹68,000 crore through IPOs, it added.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.