Why so many IPOs are flooding the Indian market?
This article explains the sudden rise in number of IPOs in India.
We have seen a sharp rise in IPOs in 2023 and then again in 2024. 2024 has already passed and the no. of IPOs are all time high. NSE (National Stock Exchange) has seen the highest no. of IPOs in Asia, i.e. about 268 and raising about $18.5 billion. So naturally we might have the question why this is happening, while other markets are suffering setbacks.
The answer is a mixed bag of opportunity, growth aspects, necessity and lastly the bull run in the stock market. Confidence in the market has been strengthened by the equities markets' ongoing optimism, rising investor awareness, and strong liquidity circumstances. After the 2020 Covid crash, began a huge stock market rally caused Nifty to touch 26200 level. This bull run is eyed by the companies, and they are utilizing this as an opportunity to expand their business. This rally has even engaged the stocks which were earlier underperforming to touch new highs. Moreover, more retail investors have entered the stock market, thanks to greater awareness, digital trading platforms, and low-interest rates on traditional savings. This has encouraged companies to tap into a growing investor base.
Further, SEBI (Securities and Exchange Board of India) has streamlined IPO processes, making it easier and quicker for companies to go public. Initiatives like UPI-based IPO applications have also simplified participation for retail investors. Booming sectors like technology, renewable energy, healthcare, and financial services are looking to capitalize on the market's appetite for high-growth stories. Startups and established players alike are leveraging this momentum. Companies are using IPOs not just to raise capital but also to enhance their brand visibility and expand their investor base.
Although the Indian stock market somewhat depends on the US markets, this time around it is the opposite. Then remains another question, why are so many loss making companies debuting their IPOs now? The reason is simple, the comapanies are surfing the opportunities that markets bring in 2024. Although there is a bit of roller coaster ride in the markets in the end of 2024 and begining of 2025, we may still see companies surging up with lots of IPOs this year. Overall, the combination of a robust economic outlook, favorable market conditions, and strategic corporate decisions has led to a wave of IPOs in India in 2024.
