New Delhi: Driven by strong fundamentals and a resilient economy, the Indian equity markets are likely to see another record-breaking year for initial public offerings (IPOs), according to reports.
The fundraising activity in the country has been broad-based across sectors so far. Domestic investments provided resilience amid geopolitical risks and market volatility, according to a Kotak Investment Banking report.
According to the investment bank, deal sizes are consistently increasing across products, with more than 30 deals worth $500 million last year. Multinational companies (MNCs) prefer India as a listing destination by making their subsidiaries debut on Indian bourses.
At least 91 companies raised nearly Rs 1.60 lakh crore going public last year. In total, firms raised over Rs 3.73 lakh crore from the equity market, including IPOs, follow-on offers and qualified institutional placements (QIPs) last year, as per reports.
After the mega $3.3 billion IPO of Hyundai last year, LG Electronics now eyes India’s market potential with planned $1.3 billion IPO. LG Electronics’ CEO Cho Joo-wan has said that the huge business potential in the Indian market is what drove the company to pursue an IPO in the country.
The South Korean company filed a draft with the Indian bourse operator for an IPO of its Indian unit, LG Electronics India Ltd., in early December. The offering, anticipated in April or May, is expected to raise up to 2 trillion won ($1.3 billion).
Indian Markets were volatile last year, with the Nifty surpassing 26,250 and BSE Sensex surpassing 85,900 in September, and both indices gaining around 21 per cent in the first nine months of CY24.
As per reports, more than 90 companies have already filed their draft herring red prospectus (DRHP) with the markets regulator SEBI.
According to Kotak Securities, India’s macroeconomic position continues to be decent, with solid growth and BoP (currency) outlook and a manageable fiscal and inflation (barring the recent spike) outlook.
“On the other hand, net interest margins (NIMs) and credit costs of banks surprised positively, while revenues of the IT services sector saw a better-than-expected sequential recovery,” it said.
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