At Rs 1.2 trn, IPO mopup set to hit new high in 2024

The calendar year 2024 is set to go down as the best year for initial public offerings (IPOs) in terms of funds raised.

Following the IPOs of food delivery major Swiggy and two other companies slated for next week, this year’s total will reach nearly Rs 1.2 trillion, going past 2021’s record tally of Rs 1.19 trillion.

Swiggy’s Rs 11,327 crore IPO, the sixth-largest in India, and solar energy firm Acme Solar Holdings’ Rs 2,900 crore IPO opened on Wednesday (Nov 6), while health-tech firm Sagility India’s Rs 2,106 crore IPO opened a day earlier.

This record fundraising year has been underpinned by Hyundai Motor India’s Rs 27,870 crore IPO, which concluded recently.

This offering — entirely a secondary share sale by parent Hyundai Motor Corp — was India’s largest-ever IPO.

Besides Hyundai and Swiggy, other marquee deals this year include a Rs 6,560 crore IPO by mortgage lender Bajaj Housing Finance and a Rs 6,145 crore issue by electric two-wheeler major Ola Electric Mobility.

“The remarkable momentum in India’s IPO market reflects the increasing maturity of our capital markets and growing investor confidence.

"As we continue to see strong participation from both domestic and international investors, India is cementing its position as a preferred destination for companies seeking to go public,” said Prashant Singhal, India Markets Leader, EY India.

The domestic IPO market also dominated global charts for the three-month period ended September (Q3CY24).

According to EY, India accounted for 36 per cent of global listings, ahead of the US, which held a 13 per cent share.

The total number of IPO transactions this year stands at 71, including the three deals concluding next week.

This tally makes 2024 the busiest year for IPOs since 2007, which saw 100 deals.

The average deal size this year is Rs 1,684 crore, slightly below 2021’s Rs 1,885 crore.

Calendar 2021, the previous record year for IPOs, was dominated by startup IPOs, such as Paytm, Zomato, Nykaa, and CarTrade.

Notably, this year’s IPO launches span a wide range of sectors, including traditional manufacturing, health care, startups, and real estate.

Despite market turbulence, experts say the final two months of 2024 have a robust deal pipeline.

Among companies expected to launch IPOs soon are NTPC Green Energy, Niva Bupa Health Insurance Company, and Avanse Financial Services. NTPC Green, a wholly-owned subsidiary of India’s largest power generator NTPC, is planning a Rs 10,000 crore IPO, while Warburg Pincus-backed Avanse and Niva Bupa could each raise over Rs 3,000 crore.

This year’s record fundraising is seen as a boost not only to capital markets but to the broader economy.

Experts believe that the fresh capital raised will fuel capital expenditure and boost spending.

“In the equity space, 63 per cent of funds raised in the last year came from IPOs, with the rest from additional offerings. However, the key question remains: how much of this capital will be directed towards productive capex?” observed a recent note by DSP Mutual Fund.

“Corporate bonds are another major fundraising avenue.

"Of the Rs 23 trillion in outstanding bonds issued over four decades, about one-third was issued post-pandemic.

"While much of this fundraising targets capital-intensive sectors, concerns remain over how much of this capital raised will translate into actual spending,” the note added.