‘Expect many large IPOs to hit the market in H2 of FY25’

, Sonia Dasgupta, MD & CEO-Investment Banking, JM Financial.
, Sonia Dasgupta, MD & CEO-Investment Banking, JM Financial.


  • With elections behind us, we expect the second half of 2024 to be a very busy period. There are already more than 55 DRHP filed with Sebi looking to raise about 70,000 crore.
  • We anticipate healthcare, financials, energy and industrial sectors to witness significant M&A activity.

The last financial year saw around 80 IPOs in India, the highest in a decade, though their average size reduced slightly compared to FY23. However, Sonia Dasgupta, MD & CEO-investment banking, JM Financial, expects many large IPOs to debut in the second half of FY25. Besides, in the mergers and acquisitions (M&A) space, the veteran banker anticipates healthcare, financials, energy and industrial sectors to witness significant activity. Edited excerpts from an interview:

How does the equity capital market and M&A landscape look like to you?

India is rapidly emerging as a top contender in global equity capital markets. The Indian equity markets have delivered consistently about 8-10% USD CAGR returns over the last 20 years. This momentum has strong tailwinds thanks to the strong macroeconomic environment, earnings growth trajectory, and equity market inflows especially from domestic mutual funds (MFs). Apart from favourable demographics, various structural reforms in the past decade have also been strong pillars for the faith in this growth story. In FY24, JM Financial closed around 56 capital market transactions across IPO, QIPs, blocks and topped the equity league tables.

In terms of primary market outlook, we expect strong momentum to continue over the next couple of years on the back of a strong pipeline of IPOs and QIPs across sectors. With regards to M&A, robust global liquidity has provided strong buying power with financial sponsors and strategics alike. Financial sponsors are getting more comfortable to control deals as they now have multiple avenues to exit i.e. through M&As as well as blocks in the market.

Moreover, newer sectors are emerging.

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Could you elaborate on that and name a few sectors?

Deals are happening across multiple sectors like manufacturing, Industrials, specialty chemicals, digital and technology, healthcare, consumer and financials. We're witnessing a range of new businesses entering the market for example, we recently concluded IPOs of companies like Ixigo, a B2C mobile travel platform for the next billion users and TBO Tek, a leading travel distribution platform, both of which witnessed strong listing gains. Last year, we also managed IPOs of companies in the industrials space like Happy Forgings or a consumer tech story like Mamaearth.

What is your take in the M&A landscape?

The convergence of abundant dry powder, economic optimism and favourable demographics makes India an exciting and attractive destination for M&As. Companies are vying for a limited pool of attractive targets and this drives competition. Competition from foreign companies looking to tap into the Indian market further heats up the M&A market. Early engagement, flexible deal structures, and a focus on win-win outcomes are the keys to unlocking success in India's exciting M&A market.

Looking at the data, it seems PE investments in India have hit a multi-year low. What is the present scenario?

As per our internal data, on an overall basis, PE investments in India (year to date) are in line with last year ( 1 trillion in 2024 as compared to 1.1 trillion in 2023). Overall, PE investments in India in 2023 and 2024 are low as compared to 2021 and 2022. Even so, in these years, large pools of capital were invested in technology and consumer tech sectors (more than 50% in terms of deal value).

Deal momentum in traditional sectors of financial services, healthcare and IT services has picked up in this environment. We recently acted as financial advisor on the sale of Shriram Housing Finance Ltd which is the largest all cash buyout transaction in the affordable housing in India. We expect the trend to continue in the foreseeable future with potential deals in high quality assets across healthcare, consumer, IT, etc.

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Which sectors might see significant M&A transactions or block deals this year?

We anticipate healthcare, financials, energy and industrial sectors to witness significant M&A activities. Rising disposable incomes and demographics are fuelling demand for quality medical services. The availability of attractive assets and a positive sector outlook will likely drive consolidation among healthcare delivery players, such as hospitals and diagnostic chains. Meanwhile, rising credit demand will fuel M&A activity in financial services. Companies will leverage deals to expand reach and acquire new customers, while regulatory shifts may also influence M&A decisions.

Additionally, proactive initiatives by the government to promote clean energy will act as a catalyst in the renewable energy space, and expanding product portfolios and optimizing supply chains to maintain a competitive edge may drive M&A in the industrials sector.

With the upcoming IPOs, are the valuations on the higher side? Is valuation a challenge when indices are around record highs?

While indices are around record highs in the secondary market, in the primary markets, almost all the IPOs in FY25 have given positive listing gains to investors which indicate that issuers have left money on the table while pricing the IPO. Investors are willing to invest in companies with solid fundamentals. They are clearly focusing on companies that demonstrate near-term growth and strong return metrics.

What's the current pipeline you are looking at, conservatively? How many deals you are looking at in 2024?

Despite global economic uncertainties, there has been a remarkable surge in IPO activity in the last 12 months, driven by investors' confidence in the Indian economy, strong inflows into domestic MFs, and encouraging listing gains on IPOs. With elections behind us, we expect the second half of 2024 to be a very busy period. There are already more than 55 DRHPs filed with Sebi looking to raise about 70,000 crore.

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We are currently working on a strong pipeline of IPOs and QIPs across major sectors like real estate, industrials and healthcare. Our current pipeline includes a good mix of both small and large sized transactions, many of which we are expecting to hit the markets in the near future.

What is your current focus for the upcoming year regarding M&A, IPOs, and block deals? Are you prioritizing larger players and bigger deals, or are you focusing on the quantity of deals?

FY24 was a record year for IPOs and QIPs in India. We saw around 80 IPOs in FY24, the highest in the last decade. But the average size of IPOs had reduced slightly compared to that of FY23. However, we expect many large IPOs to hit the market in FY25 in the second half. Many large corporates have already filed DRHPs with the regulator and many more are planning to file it in the near term.

We have a strong mix of both small and large IPOs. We also have a robust pipeline of QIPs as corporates are increasingly looking to raise funds for capital expenditure.

Do you forsee any notable trend emerging in the private equity space?

Recently, we have seen funds (general partners) as well as limited partners (LPs) opening up to the concept of continuation funds in India. ChrysCapital raised a $700 million continuation fund. Last year, Samara Capital had raised a continuation fund. We expect this trend to intensify and grow as the Indian private equity market matures. With the recent focus on climate-related investments globally, Indian funds have also followed this trend. Climate focused funds have raised/are looking to raise about $2 billion across NIIF Climate, Edelweiss Climate, LeapFrog Climate among others, with increased focus on ESG-related investments.

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