Markets
IPOs galore in 2023 despite initial hiccups
Summary
- It was a busy year for public offerings in 2023, with strong retail interest and healthy listing gains emerging as key trends
After a subdued start to the year, 2023 ended up being largely successful for Indian primary markets. More public issues hit Dalal Street compared to the previous year. However, funds mobilized through initial public offers (IPOs) were lower than in 2022. Issues saw impressive listing gains compared to last year, and rode on a healthy retail participation. The market is expected to remain buoyant next year, too, as issues worth ₹28,440 crore wait in the wings to tap the public markets.
Late surge
Notwithstanding a dry spell in the first two months of this calendar year, the IPO market picked pace with 20 issues going public by August, with demand accelerating in September. Altogether 57 issues tapped the capital market in 2023, against 40 last year, but the amount raised was 17% lower. Further, the break-up of the amount mobilized showed that the share of fresh capital raised in IPOs this year touched an eight-year high.
Retail mojo
The issues saw great response from investors as over two-thirds of the IPOs (till November) were oversubscribed more than 10 times. Retail investors, too, demonstrated a strong interest, with 43% of the IPOs attracting a substantial response, achieving over 10 times subscription. Overseas investors also jumped on to the IPO bandwagon, as the country’s public offering market buzzed.
Shining debuts
It was all wine and roses for investors looking for quick listing gains as they bid for the issues enthusiastically. The average listing gain during this period was 27.1% compared to just 10.1% in 2022. That said, only six issues debuted poorly on the D-street.
Sizzling pipeline
The primary market is expected to ride the wave of buoyant market sentiment, with a healthy pipeline of issues ready to make their debut next year. While the secondary market gears up for general elections, the growing excitement and anxiety may also keep the IPO market busy.
