The year 2024 turned out to be a blockbuster for the primary market as equity issuances across various categories soared nearly 2.6 times compared to 2023, brokerage firm Motilal Oswal Financial Services highlighted in its report. This remarkable growth in equity issuances over the year took shape on the back of the evolving dynamics of Indian equities, which added new dimensions to its investment landscape, while enjoying sustained robust fund inflows, the brokerage stated.
The calendar year 2024 has so far been an impressive ride for Indian IPOs, with Rs 1.8 lakh crore raised through more than 317 public offers to date—an all-time high that came well above the previous record of Rs 1.3 lakh crore set in 2021 and far higher than last year's total of Rs 57,600 crore.
Over the past 12 months, IPOs have been launched by companies from a diverse range of sectors, moving beyond the traditional focus on select or emerging industries seen in previous years. In concrete terms, companies from 23 different sectors tapped into the IPO market to raise funds. MOFSL also pointed to the change in the sectoral mix of new offerings seen in recent years, reflecting shifts in the underlying economy. "Emerging sectors have gained prominence, while some previously dominant ones have seen their relative importance decline in the landscape of a new India," MOFSL stated.
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According to the brokerage, this diversification is a positive sign for Indian capital markets, offering investors a broader array of opportunities to participate in India's growth story. Despite the diversification, some sectors, albeit more than usual, dominated the IPO race. Sectors like automobiles, telecom, retail, capital goods, and e-commerce dominated new listings, together accounting for 59 percent of the total issue size from 83 companies.
As for the trend in previous years, 90 percent of the issuances in 2020 were concentrated in just three sectors – BFSI, healthcare, and real estate, while those in 2021 were primarily driven by the e-commerce sector. On the other hand, in 2016 and 2017, the IPO market was dominated by insurance companies.
Meanwhile, the IPO juggernaut this year has also rewarded investors with strong returns more often than not in 2024. Of the 78 main-board IPOs listed to date, 54, translating to 69 percent of the total, are currently trading above their offer prices, with 11 clocking in gains of over 100 percent, the MOFSL report showed.
Four main-board IPOs debuted with a premium of over 100 percent, while 18 listed at a discount to their offer prices. In contrast, among 231 SME IPOs, 28 debuted with premiums of over 100 percent, whereas 22 opened at a discount to their offer prices, the report stated.
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