India's IPO Market Set to Soar in FY25

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India's IPO Market Set to Soar in FY25

Team Finance Saathi

04/Apr/2024

Key Points:

Rising IPO Trends: The Indian IPO market is poised for significant growth in FY25, with forecasts suggesting a potential surge to $12 billion, driven by increased investor confidence and buoyancy in secondary markets.
Tech Sector Spotlight: Among the 56 companies filing for IPOs, nine are new-age tech firms aiming to collectively raise $2.5 billion, reflecting the expanding role of technology in India's economic landscape.
Market Dynamics: Despite challenges like stagnant domestic sales, debut stocks have seen impressive first-day gains, with over 70% still trading above their issue price, signaling robust investor appetite and optimism.

In a promising outlook for India's financial landscape, the initial public offer (IPO) route is poised for a substantial uptick in the fiscal year 2025, potentially reaching a remarkable $12 billion (Rs. 1 trillion), according to a recent note from the Pantomath Group. This projection follows a notable trend of growth, with 76 companies accessing the mainboard IPOs in FY24, raising approximately $7.5 billion (Rs. 62,862 crore). Notably, this figure marks a significant 21% increase compared to the previous fiscal year, showcasing a robust momentum in the IPO market despite broader economic challenges.

The buoyancy in secondary markets is emerging as a driving force behind companies' decisions to tap into the primary markets for capital infusion, leading to a resurgence in IPO activities. Deferred IPO plans are now being revisited and pursued as market conditions become more favorable. Mr. Mahavir Lunawat, the Managing Director at Pantomath Capital Advisors, foresees a substantial equity raise through IPOs in FY25, potentially surpassing the $12 billion mark. This optimistic outlook reflects growing confidence in the Indian markets and underscores the strategic shift towards leveraging IPOs for fundraising endeavors.

Amidst this surge in IPO activities, the spotlight shines particularly bright on the technology sector. Among the 56 companies filing offer documents with the Securities and Exchange Board of India (SEBI), nine are new-age tech firms. These companies collectively aim to raise approximately $2.5 billion (Rs. 21,000 crore), signaling the increasing significance of technology-driven enterprises in India's economic landscape. The influx of tech IPOs not only underscores the sector's growth potential but also highlights investors' appetite for innovative ventures with promising futures.

Despite facing challenges such as stagnant domestic sales, the performance of debut stocks remains impressive. On average, first-day gains for debut stocks stood at 28%, showcasing robust investor interest and optimism surrounding IPOs. Remarkably, over 70% of these stocks continue to trade above their issue price, indicating sustained market confidence and the ability of IPOs to generate value for investors.

The rally in mid-and small-cap segments in FY24 further reinforces the positive sentiment pervading the Indian markets. Significant increases in overall public equity fundraising reflect growing confidence among companies to explore capital-raising opportunities. This trend not only bodes well for companies seeking to fuel their expansion plans but also signals a vibrant and dynamic market ecosystem conducive to investor participation.

As India's IPO market gears up for a potentially transformative year in FY25, the landscape presents both opportunities and challenges for stakeholders. Companies eyeing IPOs must navigate market dynamics and investor expectations, while investors need to conduct thorough due diligence to capitalize on promising investment opportunities. With the right strategies in place, the Indian IPO market holds the potential to unlock new avenues of growth and prosperity, shaping the trajectory of the country's economic journey in the years to come.

Also read : The Rise of India's Mobile Device Manufacturing: Exploring Growth, Trends, and Key Players
India's mobile device manufacturing sector has witnessed an unprecedented surge, with preliminary estimates revealing a staggering 17% year-on-year increase in production value during the fiscal year 2024. Despite stagnant domestic sales volumes, the export market has remained robust, propelled by factors such as consumer preference for premiumization and the growing adoption of 5G technology. In this exploration, we delve into the factors driving this growth, the dynamics of the export market, and the key players shaping India's mobile device manufacturing landscape.

Also read : Unraveling the Dynamics of Non-Banking Financial Companies: A Closer Look at Q3 FY24 Trends
In the intricate landscape of non-banking financial companies (NBFCs), the third quarter of fiscal year 2023-24 unveiled a tapestry of diverse growth patterns. This period, spanning from October to December 2023, witnessed a 6% year-on-year increase in loan sanctions across NBFCs. Delving deeper into the numbers, we discover a fascinating narrative of resilience, innovation, and evolving consumer behavior.

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India's IPO Market Set to Soar in FY25

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