Fundraising through Initial Public Offerings (IPOs) in India has achieved remarkable success as economic growth, favourable market trends, and enhancements in the regulatory environment have enabled companies to amass a record Rs 1.6 lakh crore in 2024. The upcoming year appears even more promising with a robust pipeline of offerings. This exceptional performance not only underscores issuers’ confidence but also reflects investors’ enthusiasm to capitalise on listing-day profits and to support firms with substantial long-term growth potential.
Highlights
Significant Milestones in 2024
The year was highlighted by Hyundai Motor India’s landmark IPO, which stands as the largest in the nation’s history, successfully raising Rs 27,870 crore. A diverse range of companies—large, mid-sized, and small—leveraged the IPO route in 2024, with the average issue size increasing significantly from Rs 867 crore in 2023 to over Rs 1,700 crore this year. The vibrancy of the IPO market was evidenced by at least 15 launches occurring in December alone.
Future Projections for IPOs
Based on the 75 IPO documents currently at varying stages of approval and marketing, Munish Aggarwal, Managing Director and Head of Equity Capital Markets at Equirus, forecasts that issuance activity in 2025 could surpass Rs 2.5 lakh crore. The forthcoming year’s pipeline is expected to highlight major offerings, including HDB Financial Services’ proposed Rs 12,500 crore issue, LG Electronics India’s Rs 15,000 crore public offering, and Hexaware Technologies’ Rs 9,950 crore proposal.
2024 IPO Summary
Data from the exchanges indicates that 90 new public offerings launched in 2024, collectively raising Rs 1.6 lakh crore. This amount vastly exceeds the Rs 49,436 crore raised by 57 companies through IPOs in 2023. In comparison, 63 companies raised Rs 1.2 lakh crore in 2021, marking that year as the most successful for IPOs in two decades, driven by ample liquidity and a surge in retail investor participation.
The small and medium enterprises (SME) sector also witnessed a resurgence, with a total of 238 businesses raising Rs 8,700 crore, nearly double the Rs 4,686 crore collected in 2023, according to data from primedatabase.com. This increase reflects a growing interest in SME public offerings, though it brings higher risks for retail investors.
Enhanced Regulatory Framework
In response to these dynamics, SEBI has introduced stricter regulatory measures, including profitability criteria, a limit on the offer-for-sale (OFS) component, and a “draw of lots” system for non-institutional investors (NIIs) to protect smaller investors. Experts have attributed this year’s robust IPO activity to a stable economic climate, continuity in central government policies, and all-encompassing economic growth.
“Stable economic conditions, policy consistency at the central government level, coupled with widespread growth have encouraged companies and investors to pursue fundraising. Foreign portfolio investors have also been significant buyers, particularly in larger IPOs,” remarked Pranjal Srivastava, Partner – Investment Banking at Centrum Capital.
Several factors, such as private equity exits, sponsor-led transactions, and adjustments in corporate funding strategies, have spurred IPO activity. “The resurgence in manufacturing and heightened private capital expenditure are pivotal contributors as companies aim to fund expansion and modernisation,” explained Neha Agrawal, MD & Head, Equity Capital Markets at JM Financial Institutional Securities.
Noteworthy IPO Performances
Among the most substantial main-board IPOs this year, Hyundai Motor India led with Rs 27,870 crore, followed by Swiggy (Rs 11,327 crore), NTPC Green Energy (Rs 10,000 crore), Bajaj Housing Finance (Rs 6,560 crore), and Ola Electric Mobility (Rs 6,145 crore). Conversely, Vibhor Steel Tubes launched the smallest IPO, raising just Rs 72 crore, showcasing the variety of companies engaging with the capital markets.
Going public is vital for companies as it provides essential funds for expansion, working capital, and debt repayment, while also enhancing visibility and inviting new business opportunities. IPOs are also a common exit strategy for long-term investors.
This year experienced exceptionally high IPO subscription rates. For instance, Vibhor Steel Tubes was oversubscribed 320 times, while offerings from KRN Heat Exchanger and Refrigeration, Manba Finance, and Gala Precision Engineering each received over 200 times subscription. Additionally, IPOs from companies such as One Mobikwik Systems, Unicommerce eSolutions, Diffusion Engineers, BLS E-Services, and Exicom Tele-Systems were oversubscribed more than 100 times.
This strong demand led to significant listing gains, with over 60 companies achieving positive returns on their debut day, including Vibhor Steel Tubes, BLS E-Services, Bajaj Housing Finance, and KRN Heat Exchanger, all of which saw gains exceeding 100%. Meanwhile, India’s equity markets reached new heights, with the NSE Nifty 50 hitting an unprecedented 26,216 points on September 27 and the BSE Sensex peaking at 85,836 points on September 26, bolstered by the nation’s promising economic growth prospects.