Upcoming IPOs: The Indian initial public offering (IPO) market is witnessing a remarkable upswing, with companies now testing the waters for larger debuts following a series of successful listings. This surge in activity is set against the backdrop of India’s robust economic growth, which has made it an attractive destination for both domestic and international investors.
According to recent data, at least three IPOs valued at over $1 billion each are in the pipeline. Among these, SoftBank-backed food-delivery platform Swiggy Ltd. is considering filing for an offering that could exceed $1 billion (Swiggy IPO). The company may submit its paperwork as early as this week, signaling its readiness to capitalize on the favorable market conditions.
Adding to the excitement to the upcoming IPOs, the Indian units of two major South Korean conglomerates are also preparing to enter the fray. LG Electronics Inc. has selected banks for a potential listing of its Indian operations, which could raise up to $1.5 billion. Meanwhile, Hyundai Motor Co. is planning an even more ambitious move, with its local unit aiming to raise as much as $3.5 billion in what could potentially be the largest-ever listing in India.
Record-Breaking Year for Indian Listings
The current IPO boom has already pushed the total funds raised through Indian listings to $8.6 billion this year, surpassing the figures from each of the two preceding years. This impressive performance is partly attributed to the influx of local investors putting record amounts of money into the market, complemented by foreign investors turning net buyers of Indian equities.
Industry experts, such as Deven Choksey, managing director at KR Choksey Shares & Securities Pvt., believe that this trend is set to continue. Choksey notes that India’s expanding economy translates to a broader market for companies to tap into, driving the need for more capital-raising activities.
Impressive Returns and Market Performance
The appeal of Indian IPOs is further underscored by their strong market performance. Companies that went public in India this year have posted an average first-day gain of 30%, outperforming the global average of 22%. A prime example of this trend is Bajaj Housing Finance Ltd., the home-loan unit of India’s largest shadow lender, whose shares more than doubled on their recent debut.
Other notable successes include electric-scooter maker Ola Electric Mobility Ltd., which raised over $730 million, and baby-products retailer Brainbees Solutions Ltd., which garnered about $500 million. Both companies are now trading approximately 40% above their issue prices, demonstrating the robust appetite for new listings in the Indian market.
Upcoming IPOs and Listings
The third week of September promises to be particularly eventful for India’s primary market, with seven new IPOs and 13 companies set to list on the exchanges. In the mainboard segment, Northern Arc Capital Ltd. and Arkade Developers Ltd. are among the key offerings (key upcoming IPOs in next week). Northern Arc Capital has set a price band of ₹249–263 per share, aiming to raise ₹500 crore through fresh equity and ₹276 crore via an offer for sale. Arkade Developers, on the other hand, is looking to raise ₹410 crore through a fresh issue priced between ₹121–128 per share.
The SME segment is also buzzing with activity. Osel Devices Ltd., Pelatro Ltd., and Paramount Speciality Forgings Ltd. are launching their IPOs on September 16 and 17, with fundraising targets ranging from ₹24 crore to ₹65 crore. BikeWo GreenTech Ltd. and SD Retail Ltd. are scheduled to follow later in the week with their public issues.
Anticipated Listings and Market Expectations
As for new listings of upcoming IPOs, investors are eagerly awaiting the debuts of several companies. Bajaj Housing Finance Ltd., Tolins Tyres Ltd., and Kross Ltd. are set to list on September 16, followed by PN Gadgil Jewellers Ltd. on September 17.
Market watchers are particularly interested in Tolins Tyres, whose IPO was oversubscribed 24 times. The company is expected to list with a grey market premium (GMP) of ₹30, representing a 13% increase over its issue price. Kross, which received strong support from institutional investors, has seen its GMP adjust to ₹24, still reflecting a 10% premium over its issue price of ₹240 per share.
Regulatory Scrutiny and Market Dynamics
While the booming market for IPOs, especially smaller ones, has created numerous opportunities, it has also attracted the attention of India’s market regulator. Earlier this year, warnings were issued regarding potential price manipulation in smaller IPOs, highlighting the need for vigilance in this rapidly expanding market.
It’s worth noting that the majority of the 240 offerings in India this year raised less than $100 million each, underscoring the diversity of the market and the opportunities available for companies of various sizes.
As September unfolds for upcoming IPOs, the Indian capital markets are poised for significant activity, offering a wide array of investment opportunities across sectors including real estate, financial services, and specialty manufacturing. This vibrant IPO landscape not only reflects the country’s economic vitality but also presents both domestic and international investors with a chance to participate in India’s growth story.
