35 mainboard IPOs sizzle in H1'25, raising Rs 32,000 Cr with 61x demand

The Indian primary IPO market is experiencing a golden age. There were 35 mainboard IPOs in the first half of the year that raised around Rs 32,000 crore.  The IPOs were, on average, subscribed 61 times. This means that investors offered to buy 61 times the number of shares offered by the companies, according to data analysed by Pantomath Financial Services Group, a home-grown financial conglomerate. 

These companies were from diverse sectors like coworking space, furniture retailing and online ticket booking. Most IPOs witnessed strong retail buying, showing domestic investors remain bullish on India.

Key Trends

1.  Fuelled by a robust domestic economy and brimming with investor confidence, the IPO space has become a launchpad for growth-hungry companies and a feeding ground for eager investors.

2. Early growth stage companies are taking the IPO route, which in turn results into increasing number of IPOs and moderating IPO sizes.

3. India is set to become the new equity funding frontier for global corporations as Hyundai India and LG prepare to introduce their IPOs, paving the way for other multinational companies with significant market shares.

“Favourable market conditions, high liquidity, a conducive growth environment with stable interest rates, and benign inflation have facilitated a boom in the IPO market. The IPO market will experience a stronger pull post-budget. India is set to become the new equity funding frontier for global corporations," said Mahavir Lunawat, Managing Director, Pantomath Capital Advisors Private Limited. 

What is behind the surge in IPOs? 

Strong Macroeconomic Environment:

India's overall economic situation is positive, boosting investor confidence.

Performance of existing new stocks:

Recent IPOs have performed well in the stock market, attracting investors to participate in new offerings. This creates a positive feedback loop where successful past IPOs encourage investment in future ones.

Government Infrastructure Investments:

The government's significant investments in infrastructure projects signal future economic growth potential.

Tech Startup IPO Boom:

The recent IPOs of Go Digit, Awfis, and TBO Tek highlight a trend of new-age tech startups entering the stock market. This suggests a growing interest in this sector from both investors and potential tech companies aiming for an IPO.

Future Tech IPO Pipeline:

Companies like Swiggy, Ola Electric, FirstCry, ixigo, Unicommerce, Ola Cabs, PayU, and MobiKwik are all expected to go public soon. This signifies a strong pipeline of tech IPOs, potentially continuing the momentum in the primary market.

"We are on the brink of sustained, long-term momentum in the IPO market, with this year potentially becoming the best for IPOs. India's solid macroeconomic environment and promising growth prospects create an ideal backdrop for this vibrant IPO market. Additionally, there is robust participation from both domestic institutional investors and retail investors," said Lunawat.

In FY24, there were a total of 78 IPO listings. These IPOs collectively raised Rs 67,561 crore, averaging Rs 866 crore per issue. but it's not just the large companies that are moving towards IPO – the early growth stage companies have been embracing the IPO trend. It could be seen in the numbers, and the same is evident by increasing number of offerings and moderating average size of offerings.

India: The New Funding Frontier for Global Corporations

Hyundai India plans to list in India to raise $3 billion which would be India's biggest IPO at a valuation of up to USD 30 billion. Similarly, LG is on way along with a few others.

Hyundai India and LG's proposed IPO could pave the way for many more multinational companies that are operating in India with a significant market share but are still unlisted in the Indian markets to list in India.

The recently concluded elections are expected to boost the second half of CY25 market activity, according to Pantompath.  Improved market sentiment and a potentially stable economic environment encourage companies to launch their public offerings. Additionally, the success of several IPO listings in the first half of CY25 could further drive momentum. Overall, a stronger CY25 for the IPO market is anticipated, with increased activity, potentially larger deals, and new listings across diverse sectors. 

" A thorough analysis of individual company fundamentals and future prospects remains crucial before making any investment decisions. India's primary market anticipates a bustling period ahead, with 55 companies planning to raise over Rs 68,000 crore via IPOs," said Lunawat.