India leads global IPO market with 220 public issues in 2023: EY Report

The Indian stock exchanges, BSE and National Stock Exchange of India (NSE), topped the global IPO arena with 92 public issues in the fourth quarter of 2023, according to a report by consultancy firm EY. According to EY's Q4 IPO Trends Report, a total of 220 public issues were launched in India in the calendar year 2023, securing its position as a global leader in terms of the number of initial public offerings (IPOs). A total of $6.9 billion was raised through these IPOs in India in 2023.

The December quarter in CY23 was a remarkable phase for the primary market in India with the launch of 92 IPOs, including 61 from the small and medium enterprises and 31 main board public issues.

This reflects a 41% increase from the previous quarter and a remarkable 72% jump from the same quarter a year ago, the EY report revealed.

The number of SME IPOs during the quarter ending in December 2023 marked a 30% jump from the 47 public issues in the segment launched during the corresponding period of the previous year. On a quarter-on-quarter (QoQ) basis, the number of SME IPOs surged by a remarkable 79% from 34 issues in Q3CY23.

A sectoral analysis indicates, consumer products and retail, diversified industrial products, automotive and transportation, and technology sectors saw most of the IPOs launched in the last quarter of 2023.

Tata Technologies Limited's ₹3,042.51 crore IPO was the largest in terms of issue size during the December quarter of 2023.

The year started with a slow trend for the IPO market in India but the second half of 2023 brought a turnaround. The IPOs launched in Q4 2023 account for over 40% of public issues in the year. With more than 18 companies filing Draft Red Herring Prospectus (DRHPs) in Q4 of 2023, the road ahead looks promising for the IPO segment in 2024.

“Looking ahead to Q4FY24, the Indian IPO market is anticipated to continue its upward trajectory, buoyed by optimistic investor sentiment, a robust economy, and expectations of lower inflation and rate cuts in 2024. This positive environment is expected to fuel further growth in both the number and average size of mainboard and SME IPOs," said Adarsh Ranka, partner and financial accounting advisory services leader, member firm of EY Global.

Market regulator Security and Exchange Board of India’s (SEBI) amendment to the Real Estate Investment Trusts Regulations, 2014, facilitating the creation of Small & Medium Real Estate Investment Trusts (SM REITs), is likely to lead the market’s growth as well.