Best Dec for IPOs since 1996: 15 firms collectively raised Rs 25,425 cr

Fifteen companies have launched their initial public offerings (IPOs) in December 2024, making it the best month for public offerings since 1996. Collectively, they have raised Rs 25,425 crore, which also made December the best month in terms of the quantum of funds raised. In December 1996, 33 companies had raised Rs 931 crore.

 

One Mobikwik Systems, which raised Rs 572 crore, Vishal Megamart (Rs 8,000 crore), International Gemological Institute (Rs 4,225 crore), and DAM Capital Advisors ( Rs 840 crore ) were some of the IPOs that hit the markets last month.

 

December is usually a tepid month for IPOs as securing foreign portfolio investors (FPI) support is a challenge due to the holiday season in the latter half of the month.

 

 

From 1997 to 2020, the number of IPOs in December were in single digits. However, things changed since 2021, and barring 2022, the other three December months saw 11 IPOs.

 

Investment bankers said the domestic institutional flows in equity markets, the availability of at least some during the year-end holiday period and the post-listing returns led to the success of the IPOs in this month.

 

"Earlier, the IPO fundraising used to be driven a lot by foreign investors who used to be shut in December. But in the last three years, the market has become driven by domestic investors. Moreover, the momentum has been strong, and bankers were confident in securing good subscription numbers. FPIs have also been participating in primary issuances even when selling in the secondary markets,” said Pranjal Srivastava, partner investment banking of Centrum Capital.

 

In 2024, domestic institutions were the net buyers to the tune of Rs 5.3 trillion, and foreign investors were net buyers to the tune of Rs 1.2 trillion in the primary markets in 2024, though they were net sellers worth Rs 1.25 trillion in the secondary markets.

 

 Bankers added that the pricing of the issues made it attractive to investors at a time when valuation concerns were prevalent in the secondary markets.

 

"A lot of investors across the board in IPO transactions because the chances of returns are better. And the valuations were reasonable, at least at the IPO stage, though the run-up after listing may have made those stocks expensive," said Munish Aggarwal, managing director and head of equity capital markets at Equirus.

 

2024 was a historic year for the primary market that witnessed a record number of IPOs, both on the mainboard and in the small and midsized enterprise (SME) segment.

 

Ninety one companies raised Rs 1.6 trillion through mainboard IPOs, surpassing the 2021 record of Rs 1.2 trillion, and 240 firms raised Rs 8,757 crore through the SME platform of the exchanges, which beat the previous all-time high of 182 issues in 2023, which raised Rs 4,686 crore.

 

The mainboard IPOs in 2024 included the biggest-ever IPO of Hyundai Motor India, worth Rs 27,870 crore.