Critical Role Of IPOs In Fuelling Economic Growth Gets Record Volume Push

For starters, India has emerged as the leader in IPO volume, hosting twice those of the US and 2.5 times more than Europe. This has to be seen in the wake of the fact that India is on track to become the world’s third largest economy by 2027 with a $seven trillion GDP target by 2030, QIPs surged in 2024 with 91 deals raising a record Rs. 1,29,200 crore. It has surpassed last year’s Rs, 52,300 crore and the previous peak of Rs. 80,500 crore in CY20, making for an all-time high.

Interestingly, the global IPO market recorded 1,215 deals raising $121.2 billion, which is slightly below the 2023 levels. However, the second half of 2024 witnessed improved performance, with the US reclaiming the top spot for IPO proceeds and a record 55 per cent participation from foreign issuers. Compared to this, 76 companies raised Rs. 1.3 trillion in the first 11 months of 2024 in India. This was thanks to favourable regulatory reforms and investor confidence even during downturns.

A recent report on “What 2024 Gave: What 2025 Brings in Store” by Pantomath Group highlighted key economic and market trends, sectoral performance, and projections for the Indian and global economies. It said that 34 companies have SEBI approvals to raise Rs. 41,462 crore, whereas 55 firms await clearance for Rs. 98,672 crore, with 143 DRHPs filed in 2024, compared to 84 in 2023 and 89 in 2022. Capital markets experts feel that multinational corporations have demonstrated the strategic advantages of listing in India.

Factors such as reduced capital costs, wide consumer market, robust regulatory regime, are bound to encourage global players to consider Indian markets for their equity offerings. Increasing participation of multinational corporations on Indian Exchanges promises to add a new dimension to Indian capital market. Meanwhile, a previous study by Pantomath had first anticipated that IPO fundraising in FY25 would surpass Rs. one lakh crore—a target that has been exceeded ahead of expectations. With the continued momentum in the markets, it is now projected that equity raised through IPOs will cross Rs. two lakh crore in 2025.

This milestone is a testament to the resilience of India’s capital markets, the confidence of investors, and the critical role IPOs play in fuelling economic growth. On their part, QIPs also surged in 2024 with capital raised through 91 QIPs reaching a record high of Rs. 1,29,200 crore (2.5x of CY23) so far this year (previous year: 43 QIPs). This figure has surpassed the previous year's total of Rs. 52,300 crore, and marks the highest amount to date.

The previous peak of Rs. 80,500 crore was achieved in CY20. Quite significantly, the year 2024 was dominated by the real estate, utilities, automobiles, metals and PSU banks, which collectively accounted for 57 per cent of the total QIP issuances thus far. Of the 91 issues, six have delivered returns exceeding 100 per cent over their issue prices. More than two-thirds of the stocks have delivered positive returns against their respective issue prices.