IPOs in Limelight: Rs 60,000 Cr. Share Sales Anticipated for 2024

As 2023 wraps up, the IPO market remains ablaze, poised for a substantial Rs 60,000 crore worth of share sales in 2024. This momentum follows a stellar year where 57 Indian companies amassed about Rs 49,000 crore through mainboard IPOs. Currently, 27 firms have secured regulatory approval to launch public issues, eyeing a collective Rs 29,000 crore.

The allure of going public is not fading. The D-Street dream run, concluding in 2023, not only enticed a record number of retail investors but also triggered a rush among promoters to take their companies public. Despite the second-highest number of mainboard IPOs in over a decade in 2023, the eagerness persists, setting the stage for a Rs 60,000 crore share sale in the coming year.

Factors Driving IPO Surge in the Indian Market

Analysts project this enthusiasm to endure, fueled by robust economic growth, ample liquidity, expected rate cuts globally, and the anticipated continuity of the current regime post the Lok Sabha elections next year.

·       In the preceding year, data from the Prime Database indicates that 57 Indian companies raised approximately Rs 49,000 crore through mainboard IPOs.

·       Additionally, 27 companies received regulatory approval for public issues, targeting around Rs 29,000 crore.

·       Another 29 companies await approval, with a combined fundraising target of about Rs 34,000 crore.

In the primary market, nearly 80 firms filed draft red herring prospectuses with the Securities and Exchange Board of India (Sebi) in 2023, slightly lower than the past two years.

Looking ahead, high-profile names like Ola Electric IPO, Swiggy, and FirstCry are anticipated to enter the primary market in the new year, aiming to raise $500 million each.

Analysts foresee a market upswing in the first half of 2024, expecting rate cuts from both the US Federal Reserve and the Reserve Bank of India (RBI). Coupled with the projected BJP victory in the general elections in May, this is expected to provide further momentum to the ongoing rally.

In December 2023, amid the surging local equity markets, 11 companies raised approximately Rs 8,256 crore through share sales via IPOs. The benchmark Sensex and Nifty surged nearly 15 percent each in 2023, with BSE midcap and smallcap indices jumping around 45 percent and 50 percent.

The upcoming IPO landscape for 2024 includes highly anticipated offerings from Ebixcash, Tata Play, Indegene, Oravel Stays (OYO), Go Digit General Insurance, and TBO Tek.

Opportunities for Investors and Traders

As the IPO momentum surges into 2024, investors and traders stand to benefit from several opportunities:

1.     Diversification: Explore a diverse range of companies entering the market, including high-profile names like Ola Electric and Swiggy.

2.     Market Boost Potential: Analysts predict a market boost in the first half of 2024, creating potential opportunities for profitable trades.

3.     Strategic Investments: With better investor sentiment and active PE/VC funds, strategic investments in IPOs or bulk deals could offer lucrative returns.

4.     Traditional Sectors: Manufacturing and financial services, expected to sustain strong IPO activity, and provide additional avenues for investors seeking stability.

5.     Global and Political Factors: Keep an eye on global rate cuts, general elections, and other political developments that can impact market trends and offer strategic entry points.

Analysts further predict sustained strong IPO activity in traditional sectors like manufacturing and financial services in the new year. Manufacturing firms are particularly favoured, benefiting from India’s increasing capital expenditure and a slowdown in industrial activity in China.

Investing in Upcoming IPOs

Follow these easy steps to invest in the upcoming IPOs:

1.     Open an Account: Sign up with an online stock broker.

3.     Get a Demat Account: Look for brokers or online stock trading platforms that offer a free Demat account.

4.     Stay Updated: Keep an eye on when new IPOs are coming. 

5.     Research the Company’s financials: It is important to know the company’s history before applying for its IPO.

6.     Apply Online: Apply for the IPO online through an online broker.

Invest in the upcoming IPOs at zero brokerage!

Source- moneycontrol.com


Disclaimer: Investments in the securities market are subject to market risks; read all the related documents carefully before investing.