India witnessed the most number of IPOs during the January-March quarter compared to any other nation, at 63 public issues, representing 22 percent share in the global IPOs, a report by EY said, raising $2.8 billion worth of proceeds, which is 10 percent of the global share of IPO mop ups in Q1CY25.
Nasdaq and NYSE together cornered more than 30 percent share of the proceeds of global IPOs during the first quarter of the calendar year. The report by EY said even amid geopolitical uncertainty and global market volatility, the IPO market has been resilient despite significant market disruptions.
India's deal count fell by about 20% on year during the January-March quarter, but the deal size continued to rise, said EY, hinting at a 'potential IPO peak'.
Globally, private equity (PE)-backed IPO activity pulled in $7.9 billion from 14 deals in Q1CY25. However, venture capital (VC)-backed IPOs, took a cautious step back, with deal counts and proceeds shrinking at a time of heightened market uncertainty, especially in the US. "This suggests a more conservative stance from VC firms and their pre-IPO portfolio companies amid heightened market uncertainty," EY added.
In India, younger companies are going public at a time when the average age of European companies hitting the IPO street has more than doubled from 2021 to 42 years in Q1CY25.
The quarter also saw a greater number of profitable companies heading for IPOs compared to a year ago, signalling investor appetite for financially robust players. " In particular, the percentage of profitable companies listed in the US and India surged this quarter over Q1 2024, driven by robust demand, enhanced pricing power and efficient cost management," said the EY note.
In terms of returns on listing day, fewer IPOs in Q1CY25 eked out positive returns on the first day compared to a year ago period.
The global trend showed that more completed IPOs than a year ago but a declining pipeline of public issues, possibly hinting at ' challenging conditions' in public listings, or a shift toward alternative funding, said EY. Industrials, Real Estate, Hospitality & Construction sectors saw the most public issues but with Construction notching a record Q1 peak since 2001, driven largely by India, EY added.
The US policy shift under Trump administration has led to a higher defense spend, which in turn has fuelled momentum in defence and aerospace IPOs. "Sectors led the pack among all sectors, demonstrating confidence in IPO pipeline growth and completions, respectively. Construction notched a record Q1 peak since 2001, driven largely by India," EY said.
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