The year 2024 has brought an intense surge in India’s IPO market. This excitement is not limited to traditional businesses; a wave of startups, particularly those in digital and technology sectors, are raising substantial funds through Initial Public Offerings (IPOs). This ongoing IPO boom is reshaping various industries while giving India’s economic landscape a new direction.
This article explores the IPO boom, the sectors involved, and the opportunities it presents for investors.
What’s Happening?
India’s IPO market is currently booming, providing a powerful avenue for companies to raise funds and offering startups a platform to secure large-scale investments.
Compared to 2007, when 100 IPOs raised ₹34,179 crores, the 2024 market has already seen 70 mainboard IPOs raising over ₹1.03 lakh crores, with more on the way. Small and Medium Enterprises (SMEs) have also seen a boost, with 215 SME IPOs raising ₹7,700 crores so far in 2024, a notable increase from 2023, when 182 companies raised over ₹4,686 crores.
Why Is the IPO Boom Rising?
The primary drivers behind India’s IPO boom include a growing economy and strong financial performance by companies. According to The Economic Times, Rahul Saraf, Head of Investment Banking at Citi India, notes that India’s robust economic growth and companies’ rising earnings have boosted investor confidence, contributing to the rise in IPOs. Additionally, government support for digitalisation has helped tech startups attract significant funding.
An increase in retail investor participation is also fueling this trend. The number of Demat accounts has grown from 4 crores in 2020 to 17.5 crores in 2024. Domestic equity investments have reached Rs 128 lakh crores in FY24, further underscoring the rise in retail participation.
Sectors Driving the IPO Boom
In 2024, real estate IPOs alone raised Rs 13,500 crores — almost double compared to 2023. This growth is driven by rising demand for residential and office leasing, expansion in co-working spaces, and growth in housing finance companies (HFCs). This reflects a positive shift within the real estate sector.
Additionally, digital and e-commerce companies are utilising IPOs to expand their businesses, attracting new investors and contributing to the growth of the digital economy. This trend is creating new opportunities for Indian startups.
What’s in it for Investors?
The surge in IPOs not only opens up new investment options for investors but also helps startups and multinational corporations (MNCs) raise capital. While some IPOs — such as Bajaj Housing Finance, Tata Technologies, KRN Heat Exchanger, BLS E-Services, and Premier Energies — have provided over 100% listing gains to investors, others have yielded negative returns on listing day. Hence, thorough fundamental research is crucial before investing in any company.
What’s Next?
The future of India’s IPO market appears promising, especially with the rapid expansion of the digital economy. Government initiatives and the focus on digitalisation are giving many new startups an opportunity to flourish.
The Economic Times also reports that, according to Rahul Saraf from Citi India, future IPOs and M&A activity in India are likely to concentrate on sectors like cloud payments, new energy, and technology. These sectors could see their market cap share grow from 2% to over 25%, potentially reshaping the Indian market and offering new opportunities for investors.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The companies mentioned in the article are for information purposes only. This is not an investment advice.
*Disclaimer: Teji Mandi Disclaimer
