India’s Initial Public Offering (IPO) market has emerged as an outlier, defying the global slowdown in public listings, according to a report by Angel One Wealth, a wealth management firm.
While the global IPO market peaked in 2021, India has continued to see robust demand for public listings over the past year, driven by strong domestic inflows and the rise of emerging sectors and companies. In the first half of 2024 alone, India accounted for a quarter of global IPO volumes, with the country now hosting the highest number of mainboard-listed companies globally, exceeding 5,450.
Globally, 2021 marked a record year for IPOs, with 2,388 companies raising USD 453.3 billion, the most in two decades. However, by 2023, India led with 178 IPOs, followed by China with 103, the US with 21, and the UK with 22.
The report also highlighted that the BSE IPO Index, with a 348% absolute gain, significantly outperformed the broader BSE 500 index’s 165% gain, largely due to strong listing performances. Notably, IPOs from small and medium enterprises (SMEs) outpaced mainboard IPOs in listing gains. Average listing gains for SME IPOs surged from 2% in 2019 to 74% in 2024, while mainboard IPOs saw gains of around 30% since peaking in 2020.
Companies from sectors such as consumer products, retail, industrial products, financial services, and healthcare were the most active in tapping the IPO market, according to the report.
A recent study by the Securities and Exchange Board of India (SEBI) revealed a “disposition effect” among investors, where they were more likely to sell IPO shares with positive listing gains compared to those that listed at a loss. This study, covering 144 IPOs from April 2021 to December 2023, also found that stock returns significantly influenced investor behavior in selling decisions.
