India’s IPO Market Set for Another Strong Year with $13B Raised in Q3

India’s initial public offering (IPO) market is demonstrating remarkable momentum as it approaches what could be a third consecutive year of record fundraising. The third quarter of 2024 saw listing proceeds surpass $9 billion, marking the highest amount ever raised during this period, according to data compiled by Bloomberg. This surge has pushed the total capital raised so far this year to over $13 billion, putting India on course for one of its strongest years in the history of its equity markets.

The IPO activity gained significant traction after a relatively slow start earlier in the year. Several large-scale deals were key contributors to this upswing, including major public offerings by National Stock Exchange of India Ltd., SBI Funds Management Ltd., and Manipal Health Enterprises Ltd. Collectively, these three companies alone raised more than $4.3 billion during the quarter. Their success highlights the ongoing confidence among investors and companies despite a challenging environment for equities.

India’s broader equity market has faced volatility and weakening investor sentiment in 2024. The benchmark NSE NIFTY 50 index has declined approximately 13 percent year-to-date, making it the second-weakest major equity market globally after Indonesia. Nevertheless, robust domestic liquidity and steady demand from institutional investors have sustained the primary market’s activity, allowing companies to continue accessing capital even as investors scrutinize valuations more closely.

Samarth Jagnani, Managing Director and Head of Global Capital Markets for India and Southeast Asia at Morgan Stanley, commented on the market’s resilience, noting, "While market volatility may influence the timing of individual transactions, the underlying drivers of activity remain intact." His insight points to the structural factors supporting India’s IPO market, such as economic growth prospects and increased participation from domestic investors.

Looking ahead, the IPO pipeline is strong and diverse, signaling continued fundraising momentum into the final quarter of the year and possibly into early 2025. Fundraising totals for 2024 could approach the exceptional levels seen in 2022 and 2023, when more than $20 billion was raised annually. Traditionally, the last quarter is the most active period for IPOs in India.

Several large transactions are currently in preparation, including Jio Platforms Ltd.’s anticipated share sale expected to raise over $3.1 billion. Other significant deals include Avaada Electro Ltd.’s planned $800 million IPO and a $400 million offering by Advanta Enterprises. These sizeable deals provide bankers and market participants with greater visibility on issuance schedules and potential capital inflows in the coming months.

However, the timing of these offerings will depend heavily on prevailing market conditions and investor appetite. Issuers will need to be mindful of price sensitivity among investors, which has increased amid recent market volatility. Kailash Soni, Head of India Equity Capital Markets at Goldman Sachs, noted, "Market volatility and the availability of execution windows will determine the pace at which these offerings launch." His remarks underscore the balancing act companies face when deciding on the optimal moment to go public.

Regulatory approvals have already been granted to approximately 144 companies to proceed with IPOs, including firms such as Oravel Stays Ltd., Torrent Gas Ltd., and Sify Infinit Spaces Ltd. Meanwhile, another 73 companies have submitted draft prospectuses and are awaiting clearance from market regulators. Notable names in this group include Carlsberg India Ltd. and MakeMyTrip India Ltd.

Bankers and market watchers expect several of these approvals to be finalized in time for companies to tap into the market before the end of the year. If this occurs, the IPO market could maintain its robust trajectory, continuing to offer companies an avenue to raise capital while providing investors access to new opportunities in India’s growing economy.

India’s IPO market performance reflects broader trends in emerging markets where local liquidity and investor interest help offset global economic uncertainties. For companies looking to expand and innovate, the equity capital market remains a vital source of funding. The developments in 2024 demonstrate the ongoing appeal of India as a destination for public listings despite external challenges.