A Thriving First Half of FY24
The primary market has witnessed unprecedented activity in the first half of the fiscal year 2023-24. This surge has been marked by a flurry of new public offerings. In fact, the number of initial public offerings (IPOs) launched during this period has reached its highest point since H1FY08.
A Closer Look at the Numbers
According to the Prime Database, 31 IPOs raised an impressive ₹26,272 crore in this duration. To put this into context, during the bullish period of April-September 2007, there were 48 IPOs, but they only managed to amass ₹21,243 crore.
| H1FY08 | H1FY24 | |
| No of IPOs | 48 | 31 |
| Amt raised (INR Cr) | 21,243 | 26,272 |
The Initial Months of H1FY24
H1FY24 began slightly subdued, with only 10 IPOs launched in the initial four months. However, the scenario took a sharp turn in the subsequent two months. This surge was particularly evident with the benchmark Nifty and the broader-market Nifty Midcap100 and Nifty Smallcap100 indices, achieving new all-time highs.
A Puzzling Discrepancy
What intrigues this situation is that, despite the significant increase in deals in the first half of FY24 compared to the same period in the previous fiscal year, the amount raised was 26 percent lower. In the first half of FY23, IPOs garnered a total of ₹35,456 crore, largely due to LIC’s ₹21,000 crore contribution, which played a pivotal role.
| Months | H1FY23 | H1FY24 | ||
| No of IPOs | Amt raised (INR Cr) | No of IPOs | Amt raised (INR Cr) | |
| April | 2 | 2,981 | 2 | 5,191 |
| May | 8 | 29,511 | – | – |
| June | – | – | 4 | 2,246 |
| July | – | – | 4 | 2,223 |
| August | 2 | 1,402 | 7 | 4,759 |
| September | 2 | 1,563 | 14 | 11,854 |
| Total | 14 | 35,456 | 31 | 26,272 |
Key Takeaways
This entire trend can be attributed to the robust performance of the secondary markets. It’s well-established that a flourishing secondary market has a ripple effect on investor sentiment, and this phenomenon is evidently spilling over into the IPO market. Positive investor sentiment in the primary markets is usually a byproduct of a strong showing in the secondary markets.
Even more encouraging is that the IPO wave shows no signs of receding. The outlook for the remainder of the year appears bright, indicating a sustained interest and confidence in the market. Both foreign and domestic investors are demonstrating a strong belief in India’s long-term growth story.
In conclusion, the first half of fiscal year 2023-24 has been remarkable for the IPO market. The surge in activity, driven by a robust secondary market, showcases the resilience and potential of India’s financial landscape. As we navigate the rest of the fiscal year, it’s clear that the momentum is set to continue.
FAQs
What factors contributed to the surge in IPO activity in H1FY24?
The surge in IPO activity can be attributed to the strong performance of the secondary markets, which bolstered investor sentiment.
Why was the total amount raised in IPOs lower in H1FY24 despite an increase in the number of deals?
Despite a higher number of deals, the total amount raised was lower in H1FY24 due to various contributing factors and the absence of a singular large contributor like LIC.
What can we expect in the IPO market for the remainder of the fiscal year?
The outlook for the IPO market remains positive, with a promising pipeline indicating continued interest and confidence from both foreign and domestic investors in India's growth story.