The overall equity fundraising in the country is expected to touch $25 billion and the IPO market would grow 30% in calendar year 2023, despite sharp declines last year, according to Kotak Investment Banking. The equity fundraising is expected to reach pre-Covid levels this year. It fell by about 43% to $16.4 billion in 2022, though India was among the top five markets globally in terms of equity fundraising. The country raised a total of $36.9 billion in 2021, a dip from $39 billion raised during the previous year, it said.
This was basically led by encouraging participation from domestic investors, S Ramesh, MD & CEO at Kotak Investment Banking, said.
The IPO pipeline of $9.5 billion is awaiting launch and that worth $6.6 billion has already been filed with Sebi and is awaiting approvals. The retail participation in IPOs has been selective and will remain so going forward, V Jayasankar, wholetime director, said.
In 2021, Indian companies raised $16.5 billion through IPOs, which fell to $7.6 billion in 2022 due to massive volatilities in the market.
“Last year was a defensive one for IPOs as the markets were severely impacted by the bearish sentiment that prevailed across the world, and there was a moderation in IPO volumes in CY22 along with reduction in the average IPO size. Even though volatilities will continue this year too, it would be more manageable,” he said.
A big number of issuances will be sized under Rs 1,000 crore and the Rs 1,000-2,000-crore bracket, while there would be a couple of large issuances. IPOs have given reasonably good valuations in 2022, and the same is expected this year too.The number of IPO deals plunged to 37 last year from 61 in CY21, while the secondary market offerings – both rights issues and qualified institutional placements – fell by 89% and 74%, respectively, in 2022.
On the IPO front, environment, social and governance (ESG) and the defence and infrastructure sectors would be in focus, Pankaj Kalra, senior executive director at Kotak Investment Banking, said.