Driven by strong fundamentals and a resilient economy, Indian equity markets are set to experience another record-breaking year for initial public offerings (IPOs). The fundraising activity in the country has been broad-based across various sectors. Reports from Kotak Investment Banking highlight that domestic investments provided resilience amid geopolitical risks and market volatility. According to the investment bank, deal sizes are consistently increasing across products, with more than 30 deals worth $500 million last year. Multinational companies (MNCs) are showing a preference for India as a listing destination by debuting their subsidiaries on Indian bourses.
At least 91 companies raised nearly Rs 1.60 lakh crore by going public last year. In total, firms raised over Rs 3.73 lakh crore from the equity market, including IPOs, follow-on offers, and qualified institutional placements (QIPs).
Following Hyundai’s mega $3.3 billion IPO last year, LG Electronics now eyes India’s market potential with a planned $1.3 billion IPO. CEO Cho Joo-wan of LG Electronics cited the huge business potential in the Indian market as the driving factor behind the company’s pursuit of an IPO in the country. The South Korean company filed a draft with the Indian bourse operator for an IPO of its Indian unit, LG Electronics India Ltd., in early December. The offering, anticipated in April or May, is expected to raise up to 2 trillion won ($1.3 billion).
Indian markets were volatile last year, with the Nifty surpassing 26,250 and BSE Sensex surpassing 85,900 in September, both indices gaining around 21 percent in the first nine months of CY24. Reports indicate that more than 90 companies have already filed their draft red herring prospectus (DRHP) with the market regulator SEBI.
Kotak Securities reports that India’s macroeconomic position remains solid, with strong growth and a manageable fiscal and inflation outlook, despite recent spikes. Additionally, net interest margins (NIMs) and credit costs of banks have shown positive surprises, while revenues of the IT services sector saw better-than-expected sequential recovery.
