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There is no stopping the Indian IPO market with as many as 63 companies raising nearly 1.2 lakh crore through initial share sales so far in 2021, driven by a slew of new-age tech companies, according to a report by Prime Database.

Strong retail participation has also helped the primary share sale market as the IPO activity clocked an increase of 156% year-on-year and 314% by deal numbers and proceeds, an EY IPO trends report said.

In India there is also a strong pipeline for IPOs in 2022. More than 15 companies filed their draft red-herring prospectuses (DRHP) in Q4 of 2021, with plans to complete their IPOs in Q1 2022.

Strong domestic and global demand are expected to continue to contribute to positive IPO activity. However, there could be headwinds resulting from the lingering pandemic in Europe, together with impact from higher inflation and interest rates in the near to medium term, the EY report said.

Key highlights of the EY IPO trends report

- In India, year-on-year IPO activity increased 156% and 314% by deal numbers and proceeds, respectively.

- By proceeds, 2021 represented the best IPO year in India in the last 20 years.

- In the main markets (i.e., BSE and NSE), there were twenty IPOs in Q42021 versus ten IPOs in Q42020 and nineteen IPOs in Q32021. This represents an increase of 50% compared to Q42020 and an increase of 5% compared to Q32021.

- As regards to SME markets, there were 16 IPOs in Q42021 versus nine and 14 IPOs in Q42020 and Q32021, respectively, representing a increase of 78% and 14% as compared to Q42020 and Q3 2021 respectively.

- Ample global liquidity, strong earnings and increased retail participation were among the main factors driving the markets in 2021.

- Several start-ups completed their IPOs in H2 2021, opening a new horizon for domestic capital markets.

- There are many companies that have planned an exit, which include key PE-backed and government companies.

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