Equity raised through IPOs will cross Rs 2 trillion in 2025: Report

India has emerged as the global leader in Initial Public Offerings (IPOs), hosting twice as many IPOs as the United States and 2.5 times more than Europe, shows data analysed by Pantomath Group. In the first 11 months of 2024 alone, 76 companies raised Rs 1.3 trillion. Pantomath Group’s report now predicts Rs 2 trillion+ record-breaking IPO fundraising in 2025.

 

"India achieved a historic milestone by securing the top position globally in terms of IPO volume for the first time, surpassing both the US and Europe, with nearly double the number of IPOs listed compared to the US and two-and-a-half times more than Europe. In contrast, the US reclaimed the lead in IPO proceeds for the first time since the peak in 2021, reinforcing its status as the most vibrant and appealing market for global investors," noted the report.

 

Meanwhile, tighter regulations in mainland China resulted in the weakest IPO performance in a decade in that region. The Technology, Media and Telecommunications (TMT), industrials, and consumer sectors were the leading drivers of global IPO activity, collectively representing about 60% of the total IPOs by both number and proceeds. 

 

The table above shows that India leads globally in IPO activity, with 332 IPOs, significantly outpacing the US at 205 and China at 130. Western Europe and Japan trail far behind with 64 and 80 IPOs, respectively. 

 

This suggests that India is experiencing a booming IPO market.

 

However, despite having fewer IPOs, the US dominates in total IPO value at $35.6 billion, indicating larger IPO sizes on average. India follows at $22.7 billion, reflecting a vibrant but smaller-scale IPO market. Western Europe and China

have comparable IPO values at $17.7 billion and $17.0 billion, while Japan lags significantly at just $2.3 billion. This highlights the disparity in the scale of IPOs across regions. 

 

Average IPO size (2014-2024) shows a fluctuating but generally upward trend, with notable peaks in 2017, 2021, and 2024. This indicates that companies have progressively been raising larger amounts of capital through public offerings. The surge in 2024 suggests that market conditions and investor confidence have created an environment where larger-scale IPOs are more viable. It also highlights a shift toward big-ticket listings, reflecting the growing maturity of companies entering the public markets and the increasing ability of the Indian IPO ecosystem to support substantial fundraises. 

 

The chart showcasing average IPO subscription rates reveals a dramatic increase, from 16x in 2022 to 64x in 2024. This suggests heightened investor interest and enthusiasm, driven by strong returns and attractive valuations. It also indicates a supply-demand imbalance where the number of investors far exceeds available shares, reflecting a bullish market sentiment. Such high subscription rates might also pose challenges for retail investors in securing allocations. 

  The pie chart highlights the sectoral composition, with Industrials dominating at 30%, making it the largest contributor. Health Care comes next with an 18% share, followed by Consumer Discretionary and Financials, both at 11% and 9%, respectively. Information Technology accounts for 6%, while Real Estate and Energy contribute 4% each. Smaller sectors include Utilities (2%), Materials (1%), and Communication Services (3%). This distribution indicates a heavy reliance on Industrials, Health Care, and Consumer Discretionary sectors, reflecting their critical role in the overall market, while other sectors represent niche contributions. 

 

Among the 76 main-board IPOs listed so far, 53 companies are trading at a premium to their offer prices, with 11 of them trading at a premium of over 100% from their offer prices. Four of the 76 main-board IPOs debuted with a premium of more than 100%, while 17 debuted with a discount to their offer prices.

 

"“Multinational corporations have demonstrated the strategic advantages of listing in India. Factors such as reduced capital costs, wide consumer market, robust regulatory regime, encourage global players to consider Indian markets for their equity offerings. Increasing participation of multinational corporations on Indian Exchanges adds a new dimension to Indian capital market.”, said Mahavir Lunawat, Managing Director of Pantomath Capital, India’s leading mid-market investment bank.  2025 outlook:   For 2025, 34 companies have already secured the requisite SEBI approval for IPOs, targeting a combined Rs 41,462 crore. Additionally, 55 firms await regulatory clearance, intending to raise about Rs 98,672 crore. A company gets a one-year window from the date of SEBI approval to launch the IPO. Notably, a record 143 DRHPs were filed with SEBI in 2024, compared to 84 in 2023 and 89 in 2022. This record-breaking surge in IPO draft filings comes on the back of strong market performance indicating that strong fundraising will continue through IPO in upcoming year.  "With the continued momentum in the markets, we now project that equity raised through IPOs will cross Rs 2 trillion in the year 2025," said Lunawat.