India’s IPO Market Defies Global Trends with Record Listings

India's IPO market has become a standout player, defying global trends of subdued public issues. A report from Angel One Wealth reveals that in early 2024, India captured a quarter of global IPO volumes and leads globally with over 5,450 mainboard-listed companies.

The Initial Public Offering (IPO) market in India has emerged as a robust outlier, defying the global trend of declining public issues. According to a report by wealth management firm Angel One Wealth, while the global IPO market peaked in 2021, India's public listings surged due to strong domestic demand and inflows, particularly in emerging sectors and companies.

Remarkably, in the first half of 2024, India accounted for a quarter of global IPO volumes. This surge has positioned the country as the global leader in the number of mainboard-listed companies, surpassing 5,450. In contrast, the high point for global markets was in 2021 when 2,388 companies raised USD 453.3 billion through IPOs, marking the most significant surge in two decades.

The report highlighted that in 2023, India saw 178 companies go public, followed by China with 103, the United States with 21, and the United Kingdom with 22. The BSE IPO index, with a 348% gain, substantially outperformed the BSE 500 index's 165% rise, driven by robust listing gains. Notably, SME IPOs outshone mainboard IPOs with an average listing gain skyrocketing from 2% in 2019 to 74% in 2024.

Among the key sectors tapping into the IPO market were consumer products and retail, diversified industrial products, financial services, and healthcare. Additionally, a recent study by the Securities and Exchange Board of India (SEBI) found that investors showed a greater tendency to sell shares from IPOs with positive listing gains, known as the disposition effect. Given the increased participation of retail investors and higher oversubscription rates, SEBI's study, which analyzed data from 144 IPOs between April 2021 and December 2023, aimed to understand this investor behavior shift.

(With inputs from agencies.)