The Indian stock exchanges BSE and NSE witnessed a significant surge in initial public offerings (IPOs), with a total of 92 IPOs launched, in the quarter ending December 2023.
A new report by EY, which highlights key trends in the fourth quarter of calendar year 2023, the Indian stock exchanges, including the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), have emerged as global leaders in IPOs for the year 2023. India’s stock exchanges have secured the top position worldwide in terms of the number of IPOs, with no cross-border deals reported.
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In a notable development, the primary markets, comprising BSE and NSE, recorded 31 IPOs (including one InvIT) in the fourth quarter of 2023, marking a significant uptick compared to the same period in 2022 and the third quarter of 2023. This represents a remarkable 72% increase over Q4 2022 and a substantial 41% increase over Q3 2023.
Similarly, the Small and Medium Enterprises (SME) markets showcased remarkable growth, witnessing 61 IPOs in Q4 2023, as compared to 34 and 47 IPOs in Q4 2022 and Q3 2023, respectively. This demonstrates a robust 79% and 30% increase compared to Q4 2022 and Q3 2023, respectively.
“Looking ahead to Q4FY24, the Indian IPO market is anticipated to continue its upward trajectory, buoyed by optimistic investor sentiment, a robust economy, and expectations of lower inflation and rate cuts in 2024. This positive environment is expected to fuel further growth in both the number and average size of mainboard and SME IPOs,” said Adarsh Ranka, Partner and Financial Accounting Advisory Services Leader, member firm of EY Global.
The report further highlighted that the fourth quarter of 2023 as a standout period, representing nearly 40% of the year’s total listings. After a sluggish beginning in the first half, IPO activity surged notably in the latter half, with over 18 companies filing their Draft Red Herring Prospectus (DRHPs) in Q4 2023, hinting at a potentially brighter outlook for 2024.
Among sectors, Power & Utilities, Health, Automotive & Transportation, and Banking & Capital Markets have been notably active, as indicated by recent DRHP filings. Moreover, SEBI’s recent amendment to the Real Estate Investment Trusts Regulations, 2014, enabling the formation of Small & Medium Real Estate Investment Trusts (SM REITs), is poised to catalyze further growth and innovation.
In Q4 2023, Consumer Products & Retail, Diversified Industrial Products, Automotive & Transportation, and Technology sectors exhibited heightened activity, contributing 21, 14, 9, and 9 IPOs, respectively, across primary and SME markets. Notably, Tata Technologies Limited emerged with the largest IPO (US$ 0.37 billion) in Q4 2023, leading in terms of issue size.
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Published: 19 Feb 2024, 06:40 PM IST