India Inc Poised to Raise Over Rs 1 Lakh Crore in FY25 Through IPOs

India Inc is gearing up to raise over Rs 1 lakh crore through Initial Public Offerings (IPOs) in the financial year 2024-25, following a successful fundraising of Rs 62,000 crore in FY23-24. With a growing economy and a business requirement of around Rs 2.5 lakh crore in equity capitalization annually, companies are eager to tap into the IPO market for capital infusion.

1. Surge in IPO Activity:

• 56 companies have filed documents with SEBI aiming to raise Rs 70,000 crore.
• 19 companies secured SEBI approval to raise Rs 25,000 crore, while 37 others await regulatory clearance to raise Rs 45,000 crore.
• Notably, 9 of these prospective IPO candidates are tech firms, targeting around Rs 21,000 crore in fundraising, as per a report from Pantomath Capital Advisors.

2. Successful FY23-24 IPOs:

• In FY23-24, 76 companies accessed the public markets through mainboard IPOs, raising nearly Rs 62,000 crore, a 19% increase from the previous fiscal year.
• The average first-day gains stood at 28%, with 70% of stocks still trading above their issue price, attributed to various factors including buoyant secondary markets and active retail investor participation.

3. Optimism for FY25:

• The IPO market is buzzing with anticipation as numerous innovative offerings are set to hit the market, buoyed by India’s robust economic growth.
• Expectations are high for another stellar year for IPOs, driven by factors such as increased domestic capital influx, improved governance practices, and favorable government policies.

4. Projections and Expert Views:

• Mahavir Lunawat of Pantomath Capital Advisors forecasts IPO fundraising in FY25 to exceed Rs 1 lakh crore, with the potential for further increase if global shocks do not affect the Indian market.
• Deena Mehta, Managing Director of Asit C Mehta Investment Intermediates, anticipates unprecedented market opportunities driven by private capital resurgence and infrastructure development.

5. Market Performance in FY24:

• Key market indices like the S&P BSE IPO Index witnessed significant growth, rising 69% in FY24.
• Mutual funds and foreign portfolio investors contributed significantly to equity fundraising, with mutual funds buying shares worth Rs 1.9 lakh crore and foreign investors being net buyers worth Rs 2 lakh crore.

6. Retail Investor Response:

• Retail investor participation in IPOs in FY23-24 surged, with the average number of retail applications rising to 1.3 million.
• Strong post-listing performance, with average listing gains of 29% in FY24, contributed to increased retail investor interest.

With a robust pipeline of IPOs and favorable market conditions, India Inc is poised for significant fundraising in FY25, driving economic growth and providing investment opportunities for both retail and institutional investors.