Amid global economic downturn, Indian IPO market booms
Mumbai: India's dynamic initial public offering (IPO) market is forging ahead with larger debuts, seemingly unaffected by this week's global equity downturn.
This year, 189 companies have launched new share sales, raising $5.6 billion, making it one of the busiest IPO markets globally, according to a Bloomberg report.
At least 30 more IPOs are anticipated as domestic demand encourages companies to consider listing, the report said.
This surge highlights investor enthusiasm in India, despite the volatility in global equity markets.
Local investors, equipped with capital and eager to engage in the world's fastest-growing major economy, are overlooking global risk concerns, the report said.
Vaibhav Porwal, co-founder of Dezerv Investments Pvt. in Mumbai, said that absorption of supply is not a challenge for India, according to the report.
He noted that equity mutual funds hold about $13 billion in cash within their portfolios, and recurring investment plans are generating over $2 billion in monthly inflows, providing substantial liquidity to support any level of supply.
While most companies have raised less than $100 million this year, larger offerings are also entering the market.
Ola Electric Mobility Ltd. is set to list over $730 million on Friday, and baby-products company Brainbees Solutions Ltd. will debut with about $500 million on August 13.
Hyundai Motor Co. is expected to raise a record amount of up to $3.5 billion from the listing of its Indian unit in the coming months.
India’s market regulator is currently processing applications for Hero Fincorp Ltd.'s approximately $440 million offer and Niva Bupa Health Insurance Co.'s roughly $360 million share sale.
Other significant offerings may include the IPO of SoftBank-backed food delivery firm Swiggy Ltd.
Retail investors have been crucial to the success of these sales in India, and the offerings have also attracted foreign investors. However, volatility in global stock markets could potentially reduce the attractiveness of these assets.
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