India enters FY24 with 54 listings ready to mop up Rs 76,000cr, 19 more line up to raise Rs 33,000cr

Of the 73 companies vying for a place in the IPO pipeline, four are new-age technology firms that aspire to accumulate around Rs 8,100 crore in funding.

Following a steady yet historic year for initial public offerings (IPOs) in India during the fiscal year 2022-23, the IPO pipeline for this year is poised to remain robust.

So far, 54 Indian firms are seeking to procure Rs 76,189 crore and have secured market regulator approval, while 19 more intending to raise approximately Rs 32,940 crore are awaiting the green light from the markets regulator.

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Out of the 73 companies vying for a place in the IPO pipeline, four are new-age technology firms that aspire to accumulate around Rs 8,100 crore in funding.

As compared to fiscal year 2022-23, where 37 Indian corporates raised Rs 52,116 crore through main board IPOs, the IPO pipeline for FY24 remains strong. This amount is less than half of the record-high of Rs 1,11,547 crore mobilised by 53 IPOs in the fiscal year 2021-22.

Read: IPO filings drop by over 50% in FY23 amid unfavourable market conditions

IPO market to remain subdued 

As per industry experts, the initial public offering (IPO) market is expected to remain subdued in the first few months of the fiscal year 2023-24. Pranav Haldea, Managing Director of PRIME Database, a research firm that specializes in India's primary capital market, mentioned that due to the current weakness in the secondary market, there may be a few smaller-sized IPOs in the near future.

"It will be a while before we see larger-sized deals, especially in light of the lack of sustained interest from foreign portfolio investors," he added.

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IPO investors still nursing losses

According to Deepak Jasani, Head of Retail Research at HDFC Securities, investors who participated in IPOs in the fiscal year 2022 are still recovering from losses. He suggests that the IPO market may only experience a revival if the secondary markets perform well in fiscal year 2024. In such a case, promoters may be willing to lower their expectations.

Jasani also mentioned that the general elections scheduled for the first quarter of fiscal year 2025 could lead to some IPOs being brought forward to the third or fourth quarter of fiscal year 2024.

Notable IPOs ahead

Manish Khanna, co-founder at Unlisted Assets, predicts that IPO markets will begin to see some action in the second half of fiscal year 2023-24.

Notably, Patanjali, Tata Technologies, Oyo, and Mankind Pharma are among the key IPOs that are anticipated. Khanna also observes a shift in focus towards profit-making companies, rather than loss-making new-age companies, and a decline in promoter valuation expectations. As a result, more value is being left on the table for IPO investors.

SME IPO segment

The SME IPO segment experienced a significant surge in the fiscal year 2022-23, in contrast to the mainboard IPOs. A total of 125 SME IPOs were launched, raising Rs 2,229 crore, which is significantly higher than the 70 SME IPOs in the previous fiscal year 2021-22 that raised Rs 965 crore. The largest SME IPO was Rachana Infrastructure, which raised Rs 72 crore.

According to Manish Khanna, this trend is due to SME IPOs offering good value opportunities and attracting investor interest. He expects this momentum to continue in the fiscal year 2023-24.