India leads the world in IPOs in 2023
India seems to be unfazed by the global downturn in initial public offers (IPO). The country is the top performer in the world in terms of IPOs. The BSE and NSE have pushed India to the top of the global IPO rankings, with 80 listings in the first half of 2023. Let's see what's driving India's IPO rush.
Why does this story matter?
India's buoyant IPO market is a reflection of the country's economic resilience and a stock market that has continued to outperform most of its peers. India has continued to show steady progress in the IPO market. The country was one of the standout performers even in 2022 when the global market was extremely volatile due to geopolitical and economic reasons.
Number of IPOs in 2023 increased by 33%
The number of IPOs in India in the first of 2023 increased by 33% compared to 2022, per Ernst and Young's Global IPO Trends report. In 2022, there were 60 IPOs. According to the report, the surge in IPOs was driven by SME IPOs, which shows the underlying entrepreneurial activity. Most of them were small-ticket IPOs.
The funds raised fell in 2023
The increased presence of SMEs is reflected in funds raised in the first half of 2023. The funds raised totaled $2.1 billion, down by 62% from 2022's $5.5 billion. Compared to Q1 of 2023, however, fundraising saw an increase in Q2. This was primarily due to a shift toward larger deals. Industrials, technology, and health sectors contributed to the shift.
India's stock market is extremely bullish
The rise in India's IPO market mimics the broader market mood. The Indian stock market is in an extremely bullish zone. The Sensex and Nifty have seen multiple record peaks in the last three-month period. The market outlook also looks promising. An increase in the activity of foreign institutional investors, strong corporate growth, and steady monsoon are the chief driving forces behind the growth.
Global IPO activity has picked up
The IPO activity has picked up globally too. Although the number of IPOs and funds raised is lesser than in the first half of 2022, the Q2 of 2023 is on par with the corresponding quarter in 2022. Major economies like the US and China have recovered from the slump in 2022. Meanwhile, Europe is yet to show signs of recovery.
