India has emerged as the global leader in the number of IPOs year-to-date, according to an EY India report, as companies strive to file for IPOs before the 2024 general elections.
The third quarter of CY23 saw 21 mainboard IPOs compared to just four in the year-ago period. The proceeds raised during Q3 amounted to $1.8 billion, a surge of 376 per cent from the previous year. The Small and Medium Enterprises segment raised $165.76 million through 48 IPOs in Q3.
The three largest IPOs in Q3, in terms of proceeds, were RR Kable, Concord Biotech and SAMHI Hotels. Key sectors contributing to this IPO surge included diversified industrial products, consumer products and retail, and technology.
More than 25 companies have filed their draft documents in the third quarter of CY23, demonstrating a strong intent to raise funds in the coming quarters. The markets continue to reward companies with robust, scalable and well-governed business models.
Adarsh Ranka, Partner and Financial Accounting Advisory Services Leader, member firm of EY Global, said, “The IPO landscape is witnessing a surge in activity driven by both an urge to tap the capital markets pre-or-post general elections and strong economic activity, positive domestic and foreign investor sentiment towards India. This momentum is expected to continue well into H2 2024.”
The introduction of the T+3 mechanism for IPOs allows companies to list three days post-closing of the issue, as opposed to six days earlier. This voluntary measure will become mandatory from December 2023.