India: Investor Confidence Fuels An IPO Surge


Bucking a global trend, India is enjoying a wave of initial public offerings (IPOs) buoyed by a rebounding economy and growing investor confidence.

By year-end, India is projected to have hosted more than 200 IPOs, making the country a global leader for new offerings in 2023. According to a report by EY, in the third quarter alone, 21 new listings appeared on India’s main market, raising $1.77 billion. Last year, just four IPOs raised $372 million.

“The IPO landscape is witnessing a surge in activity,” Adarsh Ranka, a partner with EY Global, said in a statement, “driven by both an urge to tap the capital markets pre- or post-Indian general elections and strong economic activity, positive domestic and foreign investor sentiment towards India.”

The spate of offerings, which started to pick up around April, marks a reversal in fortunes for India’s public markets. In January, investor confidence was battered when a report by short sellers Hindenburg Research accused the multinational Adani Group of accounting malpractice, sending share prices into freefall and sparking fear of contagion. 

Much of the recent IPO activity has been in sectors such as industrial products, technology, consumer products, and retail. The three largest IPOs in the third quarter were cable maker RR Kable, Concord Biotech, and Samhi Hotels. Momentum did not slow in November, which also produced an unusually high number of offerings. 

At the time of writing, five companies are on the cusp of going public, expecting to raise some $840 million between them in a single week. The most significant is Tata Technologies, the engineering and research unit of the conglomerate, with a price range of 475 to 500 rupees per share, valuing the business at $2.5 billion. It will be the first time a Tata unit has gone public in two decades.

Another notable offering on the horizon is Softbank-backed electric vehicle maker Ola Electric, which is reportedly preparing to file for an IPO in the coming weeks worth $700 million.

EY projects India continuing to ride the IPO wave until at least the latter half of 2024.



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