MUMBAI : The Indian markets are poised to witness initial public offerings (IPOs) worth $12-13 billion in 2024, V. Jayasankar, managing director and a board member at Kotak Investment Banking, said.
IPOs of new-age tech companies, such as Ola Electric, FirstCry and Swiggy, are likely to fuel a significant part of this activity, according to the company.
During its annual media round up, the firm’s investment banking team said it was expecting equity capital market activity to double from 2023. “With inflows from domestic institutional investors and foreign institutional investors put together we expect more than $50 billion worth of equity capital market demand in 2024.”
In 2023, DIIs contributed $22.3 billion, while FIIs added $20.5 billion, resulting in a combined inflow of around $42.8 billion.
Kotak expects IPO volumes to surge in 2024 with a significant uptick in average deal size compared to 2023. The momentum in sell-downs is also expected to persist, driven by private equity and venture capital (PE-VC) exits amid robust institutional flows.
In 2023, around $6.35 billion was raised by companies, including Tata Technology, Mankind Pharma, Doms and Flair Writing, among others via public issues. However new-age technology companies made up 2% of IPO volumes, with beauty and personal care brand Mamaearth’s parent Honasa Consumer, making its debut on the stock exchanges towards the end of the year.
According to Kotak Investment Banking, India’s IPO market is evolving beyond the traditional banking, financial service and insurance (BFSI) sector, and expanding into emerging areas such as electric vehicles, fintech and consumer tech. The shift showcases a broader spectrum of investment opportunities, it added.
However, in 2024, it expects more than half a dozen new-age tech unicorns to list on the bourses, driving up volumes, Jayasankar said. The companies, that are inching towards profitability with cleaner balance sheets are expected to hit the market after the general elections.
“In all, we expect $12-3 billion worth of IPOs in 2024,” he added.
Besides driving volumes, new-age companies are also going to bulk up the average IPO size in 2024, he said. “In 2024, the average IPO sizes are likely to inch up to $200 million, against around $109.5 million in 2023.”
Within 12-24 months, Kotak also anticipates new-age firms to facilitate exits and block deals exceeding $10 billion in value.
In 2023, a significant share of equity capital market activity was driven by sell-downs by financial sponsors. The year also witnessed more than $24 billion in sell-downs, while follow-ons amounted to around $7.7 billion.
Overall, Kotak expects the funding winter to end during 2024, marking the return of public market dynamism and improved equity returns.
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Published: 09 Jan 2024, 09:56 PM IST
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
