The initial public offering (IPO) activity in India is headed for a record year, thanks to re- emergence of larger listings that could help the country far exceed the initial expected target of $5 billion in proceeds this year, says an EY report. According to the report, the BSE and its SME platform hosted 16 IPOs raising $1.8 billion; one of the highest by proceeds in EMEIA (Europe, Middle East, India and Africa) this quarter. The SBI Life Insurance Co raised USD 1.3 billion on BSE, one of the largest by proceeds in EMEIA this quarter. “Despite market volatility resulting from the introduction of the Goods and Services Tax in July, India’s IPO outlook remains strongly buoyant,” the EY Global IPO Trends: Q3 2017 report said.
The report noted that an increased number of issuers are aiming to take advantage of a rally in the stock market and the re-emergence of larger listings in the pipeline can also help India far exceed the initial expected target of USD 5 billion in proceeds for 2017. There has been strong activity in the insurance sector due to regulatory changes and a number of major insurance companies are getting ready for IPO. The Indian government also plans to list four of its public defence units.
“Successful completion and listing of SBI Life Insurance IPO, one of the largest in recent times, demonstrates the strengths of the Indian IPO environment and with the continued buoyancy in the equity markets, year 2017 is likely to be a record year in relation to fund raising through equity markets,” said Sandip Khetan, Partner and National Leader, FAAS, EY India Vish Dhingra, Partner EY India. Meanwhile, global IPO activity for 2017 is also on course to be the busiest year since 2007 with 1,600 to 1,700 IPOs raising USD 190 billion to USD 200 billion, the report said.
IPO volume in the first nine months of 2017 has already exceeded the full-year totals for 2016. This period saw 1,156 deals raising USD 126.9 billion, an increase of 59 per cent by number of IPOs and 55 per cent by proceeds compared with the first nine months of 2016, the report said.