India’s Thriving IPO Market, Eleven Indian Companies To Tap Over Rs 10,000 Crore In September Via IPOs, Tech, Fintech, and Beyond

IPO Bumper

In September, eleven Indian companies are gearing up to tap into the primary market through IPOs, aiming to raise more than Rs 10,000 crore collectively.
The surge in IPO activity is fueled by the record-breaking performance of benchmark stock indices, including the Nifty 50, which recently crossed the 20,000 milestone for the first time.

Already, three companies have successfully raised Rs 977 crore through IPOs this month, and the subscription rates for these offerings reflect strong investor interest.

Ideaforge Technology Ltd. leads the pack, with a remarkable oversubscription rate of over 160 times; at the same time, Ratnaveer Precision Engineering Ltd.’s IPO garnered substantial attention with a 94-times subscription rate.

In the upcoming week, three more companies, namely Sai Silks Kalamandir Ltd., Signature Global, and Manoj Vaibhav Gems Ltd., are planning IPOs to raise over Rs 2,140 crore collectively.

The standout offering of the month is expected to be JSW Infrastructure’s IPO, which aims to raise Rs 2,800 crore through a fresh issue of shares; the IPO is scheduled to open in the final week of September, specifically between September 25 and September 28.

The Year So Far
The year 2023 has proven to be a blockbuster year for the Indian IPO market, marked by robust debuts and significant returns, and most IPOs have delivered double-digit gains, with some soaring as high as 106% since their listing.

However, experts caution investors against being swept up in this exuberant market sentiment and emphasize the importance of scrutinizing fundamentals and valuation.

The IPO market’s impressive performance is attributed to the rally in the secondary market, where domestic indices like BSE Sensex and Nifty50 have recorded substantial year-to-date gains of 8.76% and 8.55%, respectively.

India witnessed 14 major IPOs in 2023, with Utkarsh Small Finance Bank standing out as the top performer, having surged 106% since its July 21, 2023 listing.
Other notable IPOs include Cyient DLM, with returns of 95% and Mankind Pharma’s Rs 4,325 crore issue, which has gained 61% since its listing.

However, not all IPOs have enjoyed success, as Udayshivakumar Infra is currently trading at a 15% discount from its issue price of Rs 35.

Despite global economic uncertainty, Indian exchanges have maintained a vibrant IPO market, with 80 listings in 2023, marking a 33% increase compared to the first half of 2022; the surge is partly attributed to SME IPOs highlighting entrepreneurial activity, even though the funds raised have seen a 62% year-on-year decline, totalling $2.1 billion.

Looking ahead, the IPO pipeline remains robust, with companies like NSDL, Tata Technologies, and EbixCash poised to make their stock market debuts.

India is anticipated to witness a surge in tech IPOs in the coming years, with potential candidates displaying strong revenue, sustainable growth, solid EBITDA, and defensible business models.

Technology, Fintech, and Beyond
New-generation firms are also joining the bandwagon, such as Snapdeal, which has submitted their regulatory filings and is attracting significant attention, given the mixed responses that internet companies have been receiving. Snapdeal is poised to become one of the pioneering large e-commerce companies to test the market waters.

Navi Technologies, led by Sachin Bansal, is another fintech player set to join the ranks of companies like Policybazaar. Meanwhile, the well-known brand FabIndia has resubmitted its documents.

Despite concerns among investors about these modern enterprises, experts foresee a surge in tech IPOs in India in the years ahead.

Honasa Consumer, the parent company of Mamaearth, has received approval from SEBI for its IPO, albeit with a delay extending into this year’s March.

By the fiscal year 2025, India is expected to have up to 40 new-age companies listed and ready for IPOs, a number that could grow to 90 by FY28.
Promising categories for IPO-ready companies include Software as a Service (SaaS), B2C Product Companies, and FinTech, as highlighted by Rohan Agarwal, a partner at Redseer, in a recent report.

Agarwal believes that these companies boast substantial revenues, sustainable growth, robust EBITDA, and operate on defensible business models, positioning them as strong contenders for IPOs.

Additionally, speciality chemicals company Balaji Specialty Chemicals, based in Solapur, aims to contribute to the list of companies that have delivered significant returns to their investors, given the favourable upcycle in the sector.

The current trend in India’s IPO market emphasizes its immense potential, with a notable surge in recent years, and so the coming months are anticipated to bring substantial momentum to the Indian IPO market, spanning both the primary and SME market segments.

Market experts caution investors to exercise caution and carefully assess the quality and valuation of IPOs, drawing lessons from the past when overvalued IPOs experienced significant price declines.

The Last Bit, India’s IPO market is experiencing a remarkable surge in activity and investor interest, driven by strong market performance and a promising lineup of companies looking to go public.

It is evident that new-age companies, especially those in the tech and fintech sectors, are poised for significant growth with promising financials, sustainable business models, and a surge in investor interest; these companies are driving the market forward.

The coming years hold the promise of a vibrant IPO ecosystem, offering ample opportunities for investors and innovative enterprises; however, investors are advised to approach these offerings cautiously, considering both the fundamentals and issue prices to make informed decisions in this dynamic market environment.