Fundraising through initial public offerings (IPOs) has set a new milestone in 2024, surpassing the previous record set in 2021 even as two months are remaining in the current calendar year.
The cumulative amount of funds raised through IPOs has reached over Rs 1.22 lakh crore so far in 2024, surpassing the previous record of Rs 1.18 lakh crore in 2021. Around 70 percent of this record amount has been raised since August.
While public issues raised a total of Rs 17,109 crore in August, it was followed by Rs 11,058 crore in September and an all-time monthly record of around Rs 38,700 crore in October. Previously, November 2021 held the record for the maximum IPO fundraising at Rs 35,664 crore.
Meanwhile, November will see four major IPOs -- Swiggy, Sagility India, ACME Solar Holdings and Niva Bupa Health Insurance -- aiming to raise a cumulative amount of Rs 19,334 crore.
However, following several big IPOs in October, excitement in the primary markets appears to be waning after the Hyundai Motor IPO listing. Experts suggest that the lackluster performance of a major IPO, which failed to generate listing gains on its debut day, has dampened sentiment.
Three subsequent IPOs after Hyundai also listed negatively on their respective listing days. Garuda Construction and Engineering saw marginal gains of around 12 percent at listing but is currently trading below its issue price. Hyundai is currently trading around 10 percent below its issue price, while Deepak Builders & Engineers India listed 20 percent below its issue price and is now trading at around 23 percent lower from its issue price. Waaree Energies, which was expected to debut with a 90 percent premium, is listed at a premium of 59 percent.
With Swiggy set to launch its IPO next month, investor enthusiasm remains tepid. The grey market premium for the issue is trading flat, and analysts are cautioning investors due to its loss-making status and the perception that the IPO size is overvalued.
According to analysts overall, the market is in salient period due to multiple reasons like continued selling pressure from FIIs followed by disappointing domestic quarterly earnings and rather subdued future guidance by management. This situation has eventually affected the primary market mood along with the flat debut of the largest IPO Hyundai and lower than expected listing of other IPOs. Waaree Energies pre and post-listing expectation also got affected due to subdued market mood mainly on the back of FII pressure in the overall market.
Prashant Tapse, Analyst with Mehta Equities, believes that the upcoming IPOs including that of Swiggy, Afcons Infrastructure, ACME Solar and Sagility India will feel the heat of subdued market momentum. “Overall primary investor enthusiasm is dull and low, which can affect Swiggy subscription demand similar to what was witnessed in Hyundai. We remain cautious on Swiggy due to its loss-making status and overvaluation when compared to its peers. On the primary stage it looks like there is nothing left on the table for new investors. Only risk takers can subscribe to Swiggy IPO offer”, says Tapse.
Along with record IPOs, funds raised through qualified institutional placements or QIPs have also achieved a remarkable milestone by raising over Rs 96,000 crore so far in 2024. Notably, 65 percent of this amount has been raised through QIPs since July.
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