Rs. 1.19 lakh crore and counting: 2024 becomes the year of the IPO

With the successful closing of Swiggy’s ₹11,300 crore public issue and ACME Solar’s ₹2,900 crore share sale on Friday, India’s primary market has set a new high. The amount raised from initial public offerings (IPOs) so far this year has crossed ₹1.19 lakh crore ($14 billion), surpassing the previous record of ₹1.18 lakh crore set in 2021.

India’s IPO fundraising so far this year is second globally, after the US, which has raised $26.3 billion. China ranks third with $10.7 billion, according to Refinitiv data. Expensive valuations in the secondary market and excess liquidity with institutional investors have created strong demand for public issues this year, bankers said.

“Fund flows in the primary markets have been strong from domestic investors, while foreign investors have been aggressive in the primary market despite sellers in the secondary market,” said V Jaishankar, head of equity capital markets at Kotak Investment Banking. “Despite high volatility in the secondary market, large IPOs like Swiggy have received strong demand with quality anchor investors, indicating significant appetite for IPOs in India.”

So far this month, three IPOs by Swiggy, ACME Solar and Segility India have raised ₹16,334 crore. While the Swiggy IPO was subscribed 3.59 times, ACME Solar’s issue was subscribed 2.74 times.

While FPIs have sold shares worth ₹96,946 crore so far this year, they have invested ₹87,073 crore in the primary market.

Last month, Hyundai Motor raised a record ₹27,870 crore through an IPO, which was oversubscribed 2.37 times.

‘Strong Returns’
Hyundai’s IPO broke the previous record of Life Insurance Corporation of India’s ₹21,008 crore IPO in May 2022.

Besides Hyundai and Swiggy, some of the biggest IPOs this year include Bajaj Housing, which raised ₹6,560 crore, followed by Ola Electric (₹6,146 crore) and Afcons Infra, Shapoorji Pallonji Company (₹5,430 crore). Around 20 companies have raised between ₹1,000 crore and ₹4,300 crore this year.

“Most of the IPOs listed this year have generated strong returns, encouraging investors to pump more funds into the primary market,” investment banker Ravi Sardana said. “Given the success of recent public issues and their favorable returns, the momentum in IPOs is expected to continue.”

Of the 68 companies that held IPOs this year, 49 companies’ shares are currently trading above their offer prices, while 19 are below that level. About a dozen, including Jyoti CNC, Platinum Industries, KRN Heat, Exicom Tele-Systems, Gala Precision Engineering, Bharti Hexacom, Premier Energy, Wari Energy, EPACK Durable, and Awfis Space Solutions, have more than doubled since listing.

With the number of demat accounts increasing every month, new categories of retail and high net worth investors (HNIs) are coming into the IPO market.

The total number of demat accounts in India increased to 179 million in October 2024, representing an increase of 35 million accounts in this calendar year and contributing to an average monthly increase of 3.5 million accounts.