IPO rush sets up India’s equity market for another record year

Market analysts expect primary issuance activity in 2024-25 to cross  ₹1.5 trillion. (PTI)
Market analysts expect primary issuance activity in 2024-25 to cross 1.5 trillion. (PTI)


  • Several high-profile companies and startups including Tata Capital, Hexaware, Ola Electric, and Swiggy are preparing for their public market debut in 2024-25
  • Investment bankers expect the IPO lineup in FY25 to be twice as many as in FY24, including some that are expected to exceed $1 billion

Led by several billion-dollar share sales and rising issue size, India's IPO market may set a new record in 2024-25, signalling an enthusiasm undimmed by election jitters.

Ola Electric Mobility, Swiggy Pvt. Ltd, National Securities Depository Ltd (NSDL), Afcons Infrastructure Ltd, and FirstCry operator BrainBees Solutions Pvt. Ltd have so far filed with the Securities and Exchange Board of India for their initial public offering of shares. 

Tata Capital Ltd, JSW Cement Ltd, and Hexaware Technologies Ltd are also expected to join the queue, with market experts attributing the rush for IPOs to rising investor appetite and the maturing of India’s primary markets.

Barely two months into the financial year, share issuances well over 50,000 crore, or about $6 billion, have been lined up for FY25, not including the IPO market for small and medium enterprises. ($1 = 83.26)

That’s about 85% of the total 61,915 crore (about $7.4 billion) raised by 76 companies through mainboard IPOs in FY24. In the year prior to that, 37 companies had mobilised 52,116 crore ($6.3 billion) via mainboard IPOs, according to Prime Database Group.

Investment bankers expect the IPO lineup in FY25 to be twice as many as in the previous financial year, as well as larger in size.

“Unless the markets witness a significant and sustained increase in volatility, we expect (primary) issuance activity in FY25 to easily cross 1.5 trillion," said Munish Aggarwal, head of equity capital markets and managing director at financial services firm Equirus Capital.

India’s IPO market has previously crossed the 1-trillion milestone only once, in FY22, with companies including Paytm and Nykaa raising about 1.13 trillion. 

Paytm’s parent company One97 Communications Ltd raised 18,300 crore, or about $2.4 billion, while Nykaa (Fsn E-Commerce Ventures Ltd) raised 5,351 crore, of which only about 600 crore was a primary issue.

Amit Thawani, managing director and head of investment banking at Nomura India, expects the issue size of a number of IPOs in FY25 to be larger than $1 billion. “The size of the issuances are becoming bigger and the market is also able to support such transactions comfortably."

Billion-dollar issues

According to data from Prime Database, 40 companies with a combined estimated issue size of 53,515 crore have filed offer documents with Sebi and are currently awaiting approval. Besides, as of 10 May, 19 companies with a combined estimated issue size of 11,901 crore have received the green light from the capital markets regulator.

In May alone, Blackstone-backed Aadhar Housing Finance Ltd, Carlyle-backed Indegene Ltd, GoDigit General Insurance Ltd and General Atlantic-backed TBO Tek collectively raised over 6,000 crore.

Also read | Swiggy makes a confidential filing

Others in the pipeline for IPOs include BrainBees, which plans to raise $500 million, while Swiggy and Ola Electric are expected to see IPO sizes of about $1 billion when they launch.

Carlyle-owned Hexaware is also expected to go for an IPO of at least $1 billionaccording to a Bloomberg report. JSW Cement Ltd managing director Parth Jindal told Mint in an interview that the company was planning an IPO in 2024 to raise as much as 4,000 crore.

Several fintech companies including PhonePe, PayU India, and BillDesk are also expected to go public in FY25 with large primary market raises, according to reports.

Rising average issue size

“Assuming market sentiment remains constructive post elections, we expect there to be several large IPOs coming to market," said Abhishek Joshi, executive director, head of India equity capital market, at UBS Global Markets.  UBS expects primary markets to be "very active", with several $1 billion-plus IPOs also expected, Joshi said, adding investors should have plenty of interesting opportunities to evaluate this year.

Flows into domestic funds continue to be strong as seen in the SIP (systematic investment plan) numbers, which is supporting both primary and secondary markets, he added.

Even if there is some market volatility post the Lok Sabha election, which concludes this month, it should reduce in 3-6 months, said Gaurav Sood, managing director and head, equity capital markets, Avendus Capital.

In addition to IPOs, an increasing number of companies are passing resolutions to raise capital through qualified institutional placements (QIPs), indicating that companies are pursuing aggressive growth and deleveraging plans, Sood added.

Experts believe FY25’s IPO lineup will outshine that of FY24 in sheer size.

If the average size of IPOs was around $150 million in FY24 (barring exceptions such as Mankind Pharma Ltd, which raised 4,326 crore), FY25 will see average issue sizes of about $300 million, said Neha Agarwal, managing director and head, equity capital markets, JM Financial.

“We expect many large issuances in the second half of this year, especially in consumer, new-age tech, financials, and the healthcare sector," she said.

Also read | Niva Bupa plans 3,000 crore IPO, ropes in Kotak, HDFC & others

Companies such as health insurer Niva Bupa and digital health platform IKS Health are lining up $300-500 million fundraises, as Mint reported this month. Dr Agarwal’s Health Care Ltd, the parent of publicly listed Dr Agarwals Eye Hospital Ltd, is planning a $300–400 million public share sale later this year.

Waree Energies Ltd and Afcons Infrastructure Ltd are also expected to hit the markets with larger-than-average issuances this financial year. Afcons is looking to raise about 7,000 crore (nearly $850 million), while Waree has filed to raise 3,000 crore (about $360 million), excluding the offer-for-shares component.

Election jitters

Anticipating a slowdown in IPO activity ahead of the general election, India’s stock markets experienced a surge with 22 listings during November and December, said Samir Bahl, CEO-investment banking, at Anand Rathi Advisors.

But the slowdown never played out.

Between 1 January and 15 May, 27 companies went public on Indian bourses. Standing out during this period were the big-sized IPOs of Bharti Hexacom Ltd, Aadhar Housing Finance, Indegene, and Juniper Hotels Ltd. The average listing gain of these 27 IPOs was about 28%.

“Contrary to expectations, the primary market continued to thrive with 27 listings from January to mid-May," Bahl said. “This impressive figure stands in notable contrast to the modest eight IPOs before the 2019 election and just three (ahead of the national election) in 2014."

Irrespective of any short-term bumps post the ongoing election, the positive sentiment about the Indian economy remains rock solid, reflecting strong confidence in its long-term strength and prospects, Bahl said.

Other forms of capital raise such as FPOs (follow-on public issues), rights and preferential issues are also on the rise, said Prateek Indwar, MD and head of capital markets at InCred Capital. Vodafone Idea opened its  18,000-crore FPO for subscription last month.

“The high valuations in the markets entice promoters and early investors to encash the value of their holdings—fully or partly," said Indwar. “Investors, on the other hand, are encouraged by the recent track record of IPOs, which have listed at a good premium to the issue price." 

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