IPO market booms in India, sets new record due to huge investor demand
The Indian IPO market is booming, with companies raising record amounts this year. Growing investor interest, relaxed regulations, and large deals have driven IPOs' growth.
India's initial public offerings (IPOs) have hit a record ₹1.77 lakh crore, as companies rush to meet growing investor demand for new shares.
The amount surpassed last year's all-time high of ₹1.73 lakh crore, according to Bloomberg data. Five more IPOs are scheduled to close on or before December 16, including a $1.2 billion offering by ICICI Prudential Asset Management Company, which could further increase the amount.
This growth highlights how India's stock market has become a major fundraising hub, driven by a growing number of small investors and continued interest from large investors, while other stock markets are experiencing declines.
India is making it easier for companies to list, and the large deals indicate companies are trying to raise as much money as possible before global conditions become more stringent.
Improved growth prospects and stable government policies have kept large foreign investors active in IPOs, while also selling large amounts of shares in the public stock market.
This has also helped mid-sized manufacturing and technology businesses raise money at higher valuations. Hiren Dasani, Chief Investment Officer, Emerging Markets, Ashoka Whiteoak Capital Private Limited, said that while the public stock market has generated lower returns over the past year, activity in the new stock market has been robust, reflecting the market's strength.
But this boom also brings some risks. Some companies have underperformed after listing due to overpricing. According to Bloomberg, nearly half of the more than 300 companies listed this year are trading below their target price. These include Tata Capital Limited, JSW Cement Limited, and WeWork India Management Limited.