The Indian IPO market saw significant growth in 2023, reflecting the country’s expanding economy and increasing business opportunities. This article explores the IPO landscape in India, highlighting key trends, notable performers, and regulatory changes that shaped the market in 2023.
How many IPOs in 2023?
The year 2023 witnessed a substantial increase in IPO activity across both major Indian stock exchanges. On the BSE, the number of IPOs grew by 33% year-on-year, from 90 in 2022 to 120 in 2023. NSE experienced an even more dramatic surge, with IPOs increasing by 85%, from 92 to 171.
This growth trend extended to the Small and Medium Enterprises (SME) segment as well. The NSE’s SME market saw a remarkable 114% year-on-year increase, with 120 IPOs in 2023 compared to 56 in 2022. Similarly, BSE’s SME segment grew by 60%, from 38 to 61 IPOs. These figures underscore the robust growth of India’s IPO market, particularly in the SME sector.
What Is an IPO?
An Initial Public Offering (IPO) marks a pivotal moment when a private company’s shares become available to the public for the first time. This process allows companies to raise equity capital from public investors, facilitating expansion and growth. IPOs serve as a crucial mechanism for private investors to realise gains from their investments, often including a share premium.
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Simultaneously, they open doors for public investors to participate in potentially high-growth opportunities. The transition from private to public status through an IPO is a significant milestone in a company’s lifecycle, often signalling maturity and readiness for broader market scrutiny and participation.
Top gainers in IPO in 2023 and Amount Raised
In 2023, Tata Technologies Limited emerged as the standout performer in the IPO market. With an issue size of approximately ₹3,042.51 crore, it achieved an impressive listing gain of 162.85%. Priced at ₹500, the stock closed at ₹1,314.25 on its listing day, November 30, 2023. This IPO was notably oversubscribed 69.43 times, indicating robust investor interest.
Other notable IPOs included ideaForge Technology Limited, which gained 92.78% with an issue size of ₹567.29 crore, and Utkarsh Small Finance Bank Limited, which saw a 91.76% gain on its ₹500 crore issue. These performances highlight the strong appetite for new listings in the Indian market, particularly in the technology and financial sectors.
Sectors with Higher Activity in 2023
The IPO market in 2023 saw increased activity across various sectors. Power & Utilities, Health, Automotive & Transportation, and Banking & Capital Markets emerged as the most active based on Draft Red Herring Prospectus (DRHP) filings. The fourth quarter of 2023 was particularly active, with Consumer Products & Retail leading with 21 IPOs, followed by Diversified Industrial Products (14), and Automotive & Transportation and Technology sectors (9 each) across main and SME markets.
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History of IPOs in India
The history of IPOs in India dates back to the pre-independence era, with the first modern IPO occurring in 1977 when Reliance Textiles Industries went public. Since then, India’s IPO market has evolved significantly, adapting to economic liberalization in the 1990s and technological advancements in the 2000s. Notable milestones include the introduction of book building in 1999 and the launch of SME platforms in 2012, which have democratized access to capital markets for smaller companies.
Conclusion
The Indian IPO market demonstrated robust growth in 2023, with significant increases in both mainboard and SME segments. This trend reflects the country’s economic vitality and the increasing maturity of its capital markets. The success of IPOs like Tata Technologies Limited underscores investor confidence in India’s growth story.
As the market continues to evolve, it promises to play an increasingly important role in funding India’s economic expansion and providing opportunities for both companies and investors alike.
Written By Fazal Ul Vahab
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