Best First Half for IPOs in 17 Years: 37 Firms Raise Nearly Rs 32,000 Crore

The primary market is experiencing a significant surge, with three IPOs closing this week marking the best first half for IPOs in 17 years. According to PRIME Database, 37 companies from various sectors, including co-working spaces, furniture retailing, and online ticket booking, have collectively raised nearly Rs 32,000 crore in the first half of the year. This is a substantial increase compared to 2007 when 54 companies raised Rs 20,833 crore during the peak of the bull market.

This year's fundraising is the second-highest ever, following 2022 when 16 firms raised Rs 40,311 crore, largely due to the record-breaking IPO of the state-owned Life Insurance Corporation of India (LIC).

Excluding the LIC IPO, this year tops the list in terms of the number of issues and the amount raised.

Compared to the same period last year, the funds raised have quadrupled, driven by strong liquidity support from both foreign and domestic investors and favorable valuations in the secondary market, which have encouraged new issuers. This record-setting activity is notable as it contrasts with previous election years when IPO activity slowed down significantly.

In 2019, only eight firms raised Rs 5,509 crore in the first half, while in 2014 and 2009, the numbers were even lower. This year, however, there is greater certainty about political stability, which has given issuers confidence.

Chirag Negandhi, managing director at JM Financial, noted the stability at the Centre and policy continuity, which provided comfort to issuers. He also mentioned ample liquidity from domestic institutions, family offices, and high-net-worth individuals supporting good issues.

Domestic mutual funds have invested over Rs 1.85 trillion into domestic stocks this year. Even though foreign investors have been net sellers at times, they continue to invest in valuable IPOs.

Among the largest IPOs this year, Bharti Hexacom raised Rs 4,275 crore, and Aadhar Housing Finance raised Rs 3,000 crore. The smallest IPO was Vibhor Steel Cubes, which raised Rs 72 crore. The average deal size decreased slightly from Rs 896 crore last year to Rs 859 crore this year.

The stock market has also performed well, with the Sensex up 6.8%, the Nifty up 8.1%, and the broader Nifty Midcap 100 and Nifty Smallcap 100 both up around 20%. The BSE IPO index, tracking newly listed firms, has risen 21.8% this year.

The financial sector raised Rs 7,879 crore, accounting for a quarter of the total capital raised. Looking ahead, bankers expect a brief pause before the Union Budget, but the pipeline for the remaining six months remains strong, with notable companies like Swiggy, Hyundai India, and Ola planning to go public.

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