India's IPO Market Shines Bright Amid Global Slowdown

India's IPO market is thriving despite a global decline. A report by Angel One Wealth highlights strong demand and domestic inflows, with India capturing a quarter of global IPO volumes in the first half of 2024. Moreover, SME IPOs have outperformed mainboard IPOs in listing gains.

India's Initial Public Offering (IPO) market is defying global trends of subdued public issues, according to a report from wealth management firm Angel One Wealth. The report reveals that while global IPOs peaked in 2021, India has been an outlier due to strong demand and domestic inflows, benefiting emerging sectors and companies.

In the first half of 2024, India accounted for a quarter of global IPO volumes, and now boasts the highest number of mainboard listed companies globally, numbering over 5,450. In contrast, 2021 marked a high point for global IPOs with 2,388 companies raising USD 453.3 billion, the most in two decades.

In 2023, India saw 178 companies debut on stock exchanges, far outpacing China with 103, the US with 21, and the UK with 22. The BSE IPO index showed a 348% gain, overshadowing the BSE 500 index's 165% rise, primarily driven by strong listing gains.

The report further highlights that SME IPOs outperformed mainboard IPOs in listing gains. Average gains for SMEs soared from 2% in 2019 to 74% in 2024, whereas mainboard IPOs have hovered around 30% since peaking in 2020. Key sectors tapping into IPOs include consumer products, retail, diversified industrial products, financial services, and healthcare.

A Securities and Exchange Board of India (SEBI) study found a strong disposition effect among IPO investors, who tend to sell shares with positive listing gains more readily than those listed at a loss. SEBI's in-depth study, covering 144 IPOs from April 2021 to December 2023, also revealed that returns on shares significantly impacted investor behavior.

(With inputs from agencies.)