New Delhi: Indian equity markets are likely to see another record-breaking year for initial public offerings (IPOs) driven by strong fundamentals and a resilient economy, according to a latest report.
Fundraising activities have been widespread across all sectors in the country so far. Domestic investment provided resilience amid geopolitical risks and market fluctuations, Kotak Investment Banking reported.
The size of deals across different products has been growing steadily, with more than 30 deals worth $500 million last year, according to the investment bank. Multinational companies (MNCs) prefer India as a listing destination by listing their subsidiaries on Indian stock exchanges for the first time. Last year, at least 91 companies raised around Rs 1.60 lakh crore publicly.
Overall, firms raised over Rs 3.73 lakh crore from the equity market last year, including IPOs, follow-on offers and qualified institutional placements (QIPs), according to the report. After Hyundai's mega $3.3 billion IPO last year, LG Electronics is now eyeing India's market potential with plans for a $1.3 billion IPO.
LG Electronics CEO Cho Ju-wan has said that due to the immense business potential in the Indian market, the company has decided to launch an IPO in the country. The South Korean company filed a draft with the Indian stock exchange operator for the IPO of its Indian unit LG Electronics India Ltd in early December.
The offering, planned for April or May, is expected to raise up to 2 trillion won ($1.3 billion). Indian markets remained volatile last year, with Nifty crossing 26,250 and BSE Sensex crossing 85,900 in September and both the indices gaining about 21 per cent in the first nine months (January-September) of calendar year 2024.
According to reports, more than 90 companies have already filed their draft herring red prospectuses (DRHP) with market regulator SEBI. According to Kotak Securities, India's economic outlook remains good, with solid growth, BOP (currency) outlook and manageable fiscal and inflation (barring recent surges) outlook.
“On the other hand, banks' net interest margins (NIM) and credit costs surprised positively, while IT services sector revenues saw a better-than-expected sequential improvement,” the report said.
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