EY's IPO Trends Report Highlights India's Leading Position in Global IPO Landscape

7 Aug 2023 , 11:48 AM

EY, a prominent global professional services organization, has released its IPO Trends Report, highlighting India’s significant achievements in the global IPO landscape. Indian stock exchanges, including BSE and NSE, have secured the top spot worldwide in terms of the number of IPOs and have ranked 8th in issue proceeds during YTD23, with a focus solely on domestic deals.

In the main markets (BSE and NSE), Q2 2023 saw 6 IPOs, a decrease of 57% compared to Q2 2022 and a 50% increase from Q1 2023’s 4 IPOs. In the SME markets, there were 32 IPOs in Q2 2023, marking a substantial growth of 78% from Q2 2022, although a decrease of 16% from Q1 2023.

The report suggests a positive outlook for IPO activity in India, as around 13 companies filed their Draft Red Herring Prospectus (DRHPs) in Q2 2023, contributing to the current IPO pipeline. Sectors such as Hospitality & Construction, Automotive & Transportation, Diversified Industrial Products, and Real Estate have shown considerable activity in recent IPOs.

SEBI’s regulatory amendments, aimed at enhancing transparency and market practices, include changes in pricing, disclosure of Key Performance Indicators (KPIs), confidential filing, the establishment of the Social Stock Exchange, and more.

Foreign Institutional Investors (FIIs) continue to show sustained inflows into India, driven by macroeconomic stability, political consistency, and strong financial performance. The Indian market has rallied by 8% since April 2023, supported by consistent GDP growth over 7%.

In Q2 2023, the Hospitality & Construction sector led the Main markets with 2 IPOs, while the Automotive & Transportation, Diversified Industrial Products, and Real Estate sectors each saw 2 IPOs based on Year-to-Date (YTD) figures.

Cube Highways Trust’s infrastructure investment trust IPO raised USD 637.5 million, making it the largest IPO in Q2 2023 by issue size.

Veenit Surana, Partner at EY India, commended SEBI’s amendments for enhancing market transparency and governance, fortifying the foundation for future IPO activity.

On June 30, 2023, India’s benchmark equity indices Nifty and Sensex reached all-time highs, reflecting the market’s positive sentiment and achieving record closing levels.

The significant volume and diversity of IPOs in India underscore the country’s economic resilience and its appeal as an investment destination.