IPO Boom Creates Jobs and Boosts Economy: Raise Rs 51365 Cr

Based on statistics from the Prime Database, at least 40 mainboard businesses have generated Rs 51,365 crore through initial public offerings (IPOs) in the first half of the 2024–25 fiscal year. Compared to the Rs 26,311 crore raised by 31 IPOs over the same period in the previous fiscal year, this represents a phenomenal gain of 95%. With Rs 6,560 crore raised from investors, Bajaj Housing Finance had the most extensive initial public offering (IPO) in the first half of 2024–25. Ola Electric's Rs 6,146 crore IPO and Bharti Hexacom's Rs 4,275 crore IPO came next. Conversely, with only Rs 130 crore raised, Kronox Lab was the smallest.

India's recent IPO boom has been believed to have several reasons

Investors' trust has increased due to strong economic fundamentals, remarkably rapid growth and beneficial government policies. Both institutional and individual investors find many of the firms that are listing at reasonable prices to be appealing. Furthermore, firms are finding it more straightforward to raise money through initial public offerings (IPOs) due to the Indian stock market's increasing market liquidity. The growing startup scene, especially in the technology sector, has contributed to the increase in initial public offerings. Both enterprises, which can now raise funds for growth, and investors, who can now share in the profits of prospective startups, have profited from this boom. There is never a certainty that an IPO will be successful, and losses could occur. If an investor is considering making an IPO investment, they must do extensive research and carefully examine their risk tolerance.

IPO Boom

The average deal size was Rs 1,284 crore, a significant increase from Rs 849 crore during the same time last year. It's interesting to note that 22 of the 40 IPOs occurred in only August and September. The housing finance sector mobilised the most money at Rs 9,560 crore or 19% of the amount issued. In the first half of 2023–24, the average listing gain was 28.65%; however, it rose to 34.28 percent. Thirty of the 38 issues offered saw returns of more than 10%. On the listing day, Bajaj Housing Finance delivered an incredible 136% return, followed by Premier Energies (87%), Unicommerce Esolutions (94%), and Bajaj Housing Finance (136%).

The data indicates that after two quiet years, new-generation technology businesses returned with five initial public offerings (IPOs), raising Rs 8,424 crore. These IPOs included Awfis Space Solutions, Go Digit General Insurance, Brainbees Solutions (Firstcry), Le Travenues Technology (Ixigo), and Unicommerce eSolutions.

Investors responded strongly to the IPOs during the bidding process

Thirty-five of the 38 IPOs received bids more than ten times, and seventeen more than fifty. More than three times as many people pre-subscribed to two initial public offerings. During the bidding, the one remaining IPO was oversubscribed one to three times. In the first half of 2023–24, the average number of retail applications more than doubled to 20.91 lakhs from 9.67 lakhs in the same period the previous year. Bajaj Housing Finance received the most retail applications (58.66 lakhs), followed by Northern Arc (45.13 lakhs) and Arkade Developers (45.37 lakhs).

In addition, the Rs 66,225 crore raised through QIPs—which is 195% more than the Rs 22,443 crore raised the previous year—contributed to a sizeable portion of the Rs 1,56,947 crore total public equity fundraising, which is a growth of 102% over the Rs 77,744 crore raised in the first half of 2023–2024. The pipeline is enormous. Currently awaiting SEBI approval are 55 firms seeking to raise around Rs 89,000 crore, while 26 companies requesting to raise Rs 72,000 crore already have approval from SEBI.

What does the IPO boom mean for India?

India's recent IPO boom, which shows an overwhelming need for investment, shows the nation's strong economy. Companies can raise funds through the increase in initial public offerings, which can be used to finance innovation, growth, and expansion projects. These companies frequently need more employees as they expand, which creates jobs and increases employment prospects. Furthermore, the growing initial public offering (IPO) market supports general economic growth by bringing in more capital and promoting more corporate activity. The rise of publicly traded businesses also increases market liquidity, simplifying the buying and selling of shares by investors and boosting the momentum of the Indian stock market.