India Dominates Global IPO Market with Record Q1CY23 Numbers

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According to a recent Ernst & Young report, India led the world in the number of IPOs in the first quarter of the calendar year. Despite lingering global uncertainties, the Indian IPO market has shown resilience and growth, with a 33% increase in the total number of IPOs in Q1CY23 compared to Q1CY22. Despite an 89% drop in funds raised through the main markets, the SME segment raised $82 million via 38 IPOs, representing a 123% year-on-year increase in funds raised.

The EY report further highlighted that the biggest IPO of the year in terms of proceeds was Divgi TorqTransfer Systems, which raised $50 million. The announcement did not consider the Rs 4,300 crore Mankind Pharma IPO which closed on Thursday, April 27. The report also shows that about 15 companies filed DRHPs in the first quarter of this calendar year compared to about 10 companies that filed in the last quarter of FY22, suggesting a solid pipeline of IPOs in H2CY23 and beyond. These companies come from sectors as diverse as consumer, pharmaceuticals, technology and financial services.

According to the report, India ranks first in the number of IPOs in the first quarter of 2023, despite some companies withdrawing their IPO filings due to market conditions or regulatory requirements. That results from smaller IPOs, as nearly half a dozen larger companies withdrew their IPO applications due to market conditions or regulatory requirements. The regulator (SEBI) returned the offer documents last quarter, requiring companies to comply fully with their filings.

While the IPO market has been unenthusiastic, the report expects the market to recover and activity in volatile stocks to stabilise. The high number of IPOs in the second of this year and beyond points to a brighter outlook for the Indian IPO market, with domestic and international investors expected to play a major role.

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