IPO Diary CY23: A quick wrap on the India IPO market

4 Jan 2024 , 10:36 AM

CY2023 turned out to be an eventful year for the Indian IPO (initial public offering) space after a good CY21 and CY22. Although the start to the year was not a smooth one, a lift in secondary market sentiments (Nifty gained ~19.3% in CY23 – dollar terms) resulted in a pick-up in fund raising activity from Q2CY23 onwards. Listing of a niche drone manufacturer, pure domestic pharma franchise, second largest port, 100% renewable financer, and first IPO from the Tata group after nearly two decades will etch 2023 in the memory of market participants. 

IPO Diary CY23 captures some key facts and figures as well as statistical analysis and trends w.r.t the India IPO, QIP, OFS, secondary market promoter/VC/PE sell-downs and SME IPOs in 2023. The note also carries a statistical regression study to ascertain the key parameters influencing the listing gains for a stock. 

Key highlights 

• A sum of ~US$6bn was raised last year. This comes after ~US$7.6bn of funds were mopped through IPOs in CY22. If one excludes LIC (~US$2.6bn), CY23 will infact surpass CY22 numbers.
• Mankind Pharma led the pack in terms of the highest issue by size, garnering ~US$524mn. Tata Technologies was second with ~US$368mn worth of raising.
• Other major issues in terms of size were JSW Infra (US$338mn), IREDA (US$260mn), RR Kabel (US$238mn), Cello World (US$230mn), and Honasa Consumer (US$206mn).
• IPOs that attracted the highest overall subscriptions were Motisons Jewellers (119x), Plaza Cables (114x), Aeroflex Industries (69x), Ratnavee Precision Engineering (65x), and Utkarsh SFB (64x). The IPO that attracted the highest QIB subscriptions (including anchor) was Netweb (89x). Highest HNI subscriptions were seen in Plaza Cables (387x), and Motisons Jewellers (234x). On the retail front, Plaza Cables (360x), Motisons (117x), and ideaForge (82x) saw the highest subscriptions.
• As far as listing gains are concerned, Tata Tech made an exceptional debut, gaining 163%. This was followed by ideaForge (93%), Utkarsh SFB (92%), and IREDA (87%). Major market cap gainers of CY23 were IREDA (221%), Cyient DLM (154%), Netweb (137%), and Tata Tech (136%).
• IPO Laggards of CY23 were Muthoot Microfin (-14%), Suraj Estate Developers (-8%), and Fedbank Financial Services (-3%).
• Businesses with new themes make a grand debut: Akin to the listing of insurance players in 2016-17, AMCs in 2017-18, new age tech/fintech in 2021, Electronics Manufacturing Services (EMS) was a major theme in 2023. Avalon, Cyient DLM, and Netweb were the major issues.
• Along with IPOs, CY23 also saw a revival in other sources of primary and secondary market fund raising avenues like QIPs (Qualified Institutional Placements) and OFS (Offer for Sale). Surging valuations also meant partial/full exits by promoters and Venture Capital (VCs)/Private Equity (PEs) investors from their equity holdings owned over the years.
• As per analysts of IIFL Capital Services estimate, CY23 saw ~US$20bn worth of sell-downs from promoters, and VCs/PEs. These figures were aggregated from the NSE/BSE bulk and block data sourced from Prime Database.
• Among major promoter/VC/PE sell-downs/exits in CY23 were Adani Green (~US$1.35bn), Coforge (~US$1.33bn), Adani Enterprises (~US$1.16bn), Adani Power (~US$1.06bn), Embassy REIT (~US$0.83bn), Kotak Bank (~US$0.74bn), Shriram Housing Finance (~US$0.71bn), and Mankind Pharma (~US$0.68bn).
• QIPs garnered ~US$6.5bn in CY23. Funding requirements of banking and financial services domain was evident as BAF, Union Bank, BOI, Indian Bank, Bank of Maharashtra, Cholamandalam Finance, IDFC First Bank, Federal Bank, and Aditya Birla Capital lined up for funds under the QIP route.
• Bajaj Finance (~US$1bn), PSU banking majors (Union Bank ~US$602mn; BOI ~US$540mn; Indian Bank ~US$480mn), and Cholamandalam Finance (~US$481mn) were the major issuances. Other prominent issuances were Sterling & Wilson Renewable (~US$180mn) and Kaynes (~US$169mn).