Surge in Stock Market IPOs Expected to Continue as Record-Highs Hit
The stock market has experienced a surge in initial public offerings (IPOs) as the strong performance and favorable pricing continue to attract investors. This surge has resulted in the number of IPOs reaching a multi-year high, surpassing the previous year’s total. Although the amount of money raised is lower compared to the previous year, this can be attributed to the large offerings seen in 2021-22.
The current fiscal year has witnessed 166 companies going public through IPOs, exceeding the previous full year’s count of 164. In fact, the highest number of new public offerings in the last 10 years was recorded in 2017-18, when 188 companies went public. These numbers include both large companies listing on the main board of the stock exchanges and small and medium-sized enterprises.
In terms of the money raised, the current fiscal year has seen Rs 30,090 crore raised, which is about a quarter of the Rs 1.1 lakh crore raised in 2021-22. The higher amount raised in the previous year was due to the inclusion of large offerings from PayTM, Zomato, Star Health, and Nykaa.
The buoyancy in the IPO market can be attributed to better pricing, positive market sentiments, and a robust outlook. S Ramesh, MD & CEO of Kotak Investment Banking, emphasized that the listing gains have been significantly higher in the current fiscal year compared to the previous year. Additionally, retail subscription numbers have also improved, reflecting the overall better performance of the markets.
The previous fiscal year experienced a slight downturn with the failure of LIC, the largest IPO in the country’s history, to meet investors’ expectations. However, in the last six months, the IPO market has turned around for the better. Nipun Goel, head of investment banking at IIFL, highlighted that capital raising through IPOs this year has been fairly broad-based.
Merchant bankers predict that the good times are expected to last for a few more months, as the IPO market continues to gain momentum. They also note that investors prefer to invest in companies they have been tracking for a long period. The breadth and depth of the market are showcased by the participation of both domestic and foreign investors, with the latter regaining confidence in India’s long-term growth story.
In conclusion, the stock market is currently experiencing a surge in IPOs, with the number of companies going public reaching a multi-year high. The favorable pricing, positive market sentiments, and robust outlook are driving this trend, although the amount of money raised is lower compared to the previous year. Despite this, the IPO market is expected to remain strong in the coming months, supported by capital raising from various companies and renewed investor confidence.
