IPO Mobilization Drops in H1 2023-24, But Enthusiasm Grows

IPO Mobilization Drops in H1 2023-24, But Enthusiasm Grows
IPO Mobilization Drops in H1 2023-24, But Enthusiasm Grows
IPO Mobilization Drops in H1 2023-24, But Enthusiasm Grows
IPO Mobilization Drops in H1 2023-24, But Enthusiasm Grows

IPO Mobilization Drops in H1 2023-24, But Enthusiasm Grows

IPO Mobilization Drops in H1 2023-24, But Enthusiasm Grows

IPO Mobilization Drops in H1 2023-24, But Enthusiasm Grows

Indian Corporates Raise ₹26,300 Crore in H1 2023-24

In the first half of the fiscal year 2023-24, 31 Indian corporates successfully raised ₹26,300 crore through main board IPOs. This amount represents a decline of 26% compared to the ₹35,456 crore raised by 14 IPOs during the same period in the previous fiscal year, as reported by Prime Database Group. However, when excluding the massive LIC IPO launched last year, IPO mobilization recorded a significant increase of 76%, showcasing the continued enthusiasm for new offerings in the Indian market.

Notable IPOs and Positive Public Response

Among the main board IPOs, the largest offering in H1 2023-24 was Mankind Pharma IPO, amounting to ₹4,326 crore. It was followed by JSW Infrastructure (₹2,800 crore) and RR Kabel (₹1,964 crore). In contrast, Plaza Wires’ IPO raised the lowest amount at ₹67 crore. The average deal size for these IPOs stood at ₹848 crore. Remarkably, 21 out of the 31 IPOs were launched in the months of August and September, indicating a concentrated surge in IPO activity during this period.

According to primedatabase.com, the public response to these IPOs was largely positive, with 19 out of 28 IPOs (for which data is available) receiving responses of more than 10 times, including 9 IPOs that received over 50 times subscription. Retail investors exhibited heightened interest compared to the previous fiscal year, with the average number of applications from the retail sector increasing from 7.57 lakh to 10.02 lakh. This strong retail participation led to an application value of ₹55,516 crore, significantly surpassing the total IPO mobilization.

Encouraging Listing Gains and Future Outlook

The successful listing of these IPOs played a role in bolstering investor enthusiasm. The average listing gain, based on closing prices on the listing date, surged to 29.44%, a substantial increase from the 11.56% recorded in the first half of 2022-23. As of October 3, 2023, 27 out of the 28 IPOs were trading above their issue prices, further confirming the strong performance of these offerings.

Looking ahead to the second half of 2023-24, there is a robust IPO pipeline, with 28 companies holding SEBI approval to raise ₹38,000 crore and 41 additional companies awaiting SEBI approval to raise approximately ₹44,000 crore. This indicates continued optimism in the IPO market, although the general elections may lead to a temporary pause in new offerings.

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