92 IPOs and 72% Growth: India Dominates Global Markets in Q4CY2023

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Remember that blockbuster movie you saw with a slow start that exploded in the final act? That’s precisely the story of Indian IPOs in 2023. While the first half yawned, the second half roared, culminating in a record-breaking Q4 that cemented India’s position as the undisputed global leader in IPO listings. 

Let’s find out all about the phenomenal performance of Indian IPOs and what’s driving this remarkable surge.

92 IPOs in Oct-Dec 2023

As per a report published by EY India titled ‘Q4 IPO Trends’, 92 companies, eager to tap into the public market, launched their IPOs in just three months. Of the 92 IPOs, 31 were main-board while the remaining 61 were from the small and medium enterprises (SMEs). That’s the reality of Q4 2023, an incredible figure that lifted India’s stock exchanges, BSE and NSE, to the top spot globally in terms of IPO count. 

This isn’t just a minor achievement; it’s a 72% increase over the same period in 2022 and a whopping 41% jump compared to the previous quarter. Not only did the number of IPOs skyrocket, but the SME (Small and Medium Enterprises) segment also witnessed impressive growth. A 79% increase in SME IPOs compared to Q4 2022 showcases the vibrant entrepreneurial spirit and investor confidence in this dynamic sector. Talk about acceleration!

Essential Industries Fuel India’s IPO Boom

Power & utilities, healthcare, automobiles & transportation, and banking & capital markets dominated the DRHP filings, highlighting a focus on sectors fueling the nation’s growth and catering to its citizens’ well-being.

While giants like Tata Technologies grabbed headlines with their US$ 0.37 billion IPO, the real story unfolded across diverse segments. Consumer products & retail saw 21 listings, bringing familiar brands to the public stage. Diversified industrial products (think machinery and manufacturing) chimed in with 14 offerings, showcasing the underlying strength of this crucial sector. And the transportation boom continued with 9 automotive & transportation IPOs, reflecting the growing demand for mobility solutions.

What’s fueling this phenomenal performance?

Investor optimism: The Indian economy is projected to grow at a healthy pace, and investors are bullish on the future prospects of Indian companies. This positive outlook is translating into increased demand for IPOs.

Robust ecosystem: The regulatory framework is evolving, paving the way for new players like Small & Medium Real Estate Investment Trusts (SM REITs). This opens up exciting possibilities for investors and fuels further innovation in the market.

A Symphony of Sectors: From consumer goods to healthcare, power to transportation, the IPO party had something for everyone. This diversity attracted a wider pool of investors, spreading the wealth and creating a more stable market.

SME focus: Recognizing the potential of smaller companies, regulators have made it easier for them to go public. This democratizes access to capital and fosters the growth of exciting new ventures.

Lower Inflation and Rate Cuts: Expectations of easing inflation and potential interest rate cuts in 2024 are further boosting investor confidence and making IPOs more attractive.

What are the sectors to watch out for?

Based on recent trends, the power & utilities, technology, health, automotive & transportation, and banking & capital markets are likely to remain active. Additionally, the recent regulatory changes facilitating the creation of Small & Medium Real Estate Investment Trusts (SM REITs) are expected to open new avenues for growth and innovation in the market.

So, where are we headed?

Analysts predict that the Indian IPO market will continue its upward trajectory in Q4FY24, fueled by the positive sentiment and robust economic foundations. This means more opportunities for investors, more companies joining the fold, and continued global recognition for India’s vibrant primary market.

But before you rush off to invest, remember – the market is dynamic, and past performance does not always guarantee future results. Do your research, understand the risks, and consult a financial advisor before making investment decisions.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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