Indian stock exchanges, NSE and BSE have taken the first spot globally in terms of the number of IPOs and 8th in terms of issue proceeds, said an EY report. The report focused on India’s secondary markets that captured the leading position worldwide for IPO count and an 8th spot in terms of issue proceeds during the year-to-date.
Within the main markets, encompassing BSE and NSE, the second quarter of the calendar year 2023 saw the execution of 6 IPOs, compared to 14 IPOs in the same period of 2022 and 4 IPOs in the preceding quarter of 2023. This reflected a decrease of 57% when contrasted with Q2CY22 but a substantial 50% increase when compared to Q1CY23. In tandem, the SME markets showcased robust growth, presenting 32 IPOs in Q2 2023, marking a remarkable improvement from 18 in Q2 2022 and a slight dip from 38 in Q1 2023. This translates to an impressive 78% increase vis-à-vis Q2CY22 and a modest 16% decline compared to Q1CY23.
The report predicted a promising future for IPO activities in India, with approximately 13 companies submitting their Draft Red Herring Prospectuses (DRHPs) in Q2 2023, contributing to the ongoing IPO pipeline. Sectors that have displayed remarkable activity in recent IPOs include Hospitality & Construction, Automotive & Transportation, Diversified Industrial Products, and Real Estate.
Adarsh Ranka, Partner, Financial Accounting Advisory Services Leader at EY Global’s network firm, said, “India’s flourishing IPO market signifies its boundless potential and has witnessed a remarkable surge in recent years. India’s trajectory should focus on bolstering regulatory frameworks, elevating corporate governance standards, and nurturing investor education. The months ahead are poised to bring considerable momentum to the Indian IPO market, encompassing both main and SME market segments.”
India attracted sustained investments from Foreign Institutional Investors (FIIs) due to its robust macroeconomic stability, political equilibrium, and impressive financial performance, which has contributed to an 8% market rally since April 2023. With India’s consistent GDP growth rate exceeding 7%, the market’s prospects remain optimistic. During Q2CY23, the Hospitality & Construction sector spearheaded activity in the main markets with 2 IPOs, while Automotive & Transportation, Diversified Industrial Products, and Real Estate each contributed 2 IPOs based on year-to-date figures.