IPOs in India to Surge in Second Half of Fiscal Year, Driven by Upcoming Elections

Building on the recent trend, investment bankers anticipate a flurry of initial public offerings (IPOs) in the second half of the fiscal year 2023–2024.

According to data compiled by Prime Database, up to 21 of the 31 initial public offerings (IPOs) in the first half of 2023–2024 occurred in August and September. In October, four IPOs came after it.

As of the end of September, 48 companies were awaiting regulator approval and 28 companies seeking to raise Rs 38,000 crore were in the process of obtaining Sebi approval.

As a result of the general elections, investment bankers now anticipate a busy season over the next four to five months.

Despite global concerns over geopolitical tensions, investors view India as a stable and dependable market, according to Mahavir Lunawat, chairman of the Association of Investment Bankers of India.

During the first half of the current fiscal year, foreign portfolio investors, in general

anchors and qualified institutional buyers, or QIBs, contributed 26% to the

IPO amount, which is higher than mutual funds at 20%, based on data from Prime Database.

Businesses are scrambling to raise money and take advantage of the present moment. India will hold general elections the following year as well. Thus, there may be some perceived market volatility.

In that regard, businesses seek to take advantage of opportunities and capitalize their balance sheet as soon as possible, according to Lunawat.

Investment bankers and investors alike have a great opportunity to allocate their capital to more recent stocks as a result of this.

T+3 effect

The capital market regulator Sebi shortened the period of time needed to list shares in a public offering from six working days to three working days earlier in August.

Investors now have more time to consider concurrent IPOs because the deadline has been cut in half. Additionally, it greatly reassures both domestic and foreign investors about the nature of the system we are developing, according to Lunawat.

Being thorough

According to him, there are currently 221 merchant bankers, an increase over the previous few years that prompted the association to start a capacity building campaign.

"We have an AIBI-issued due diligence manual that goes above and beyond Sebi regulations. Our due diligence manual is going to be updated, and we have formed an internal committee to investigate this.

"We have formed another committee to comprehend the uniform observations of Sebi, and we are also looking at how to streamline the approval timeframe," he stated.