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In May, the initial public offering (IPO) market saw over Rs 9,600 crore raised, marking the highest amount in eight months amidst a rally in the midcap and smallcap sectors.
Five firms collectively raised Rs 9,606.15 crore through IPOs this month, the largest fundraising since September 2023. Offers for sale (OFS) accounted for 64 percent of the total funds, around Rs 6,200 crore, while fresh capital issues contributed Rs 3,404 crore.
Four of the IPOs exceeded Rs 1,000 crore, led by Aadhar Housing Finance with Rs 3,000 crore, followed by Go Digit General Insurance at Rs 2,615 crore, and Indegene Ltd at Rs 1,842 crore. TBK Tek Ltd raised approximately Rs 1,550.80 crore. Awfis Space Solutions aims to raise Rs 598.93 crore, with its subscription window opening today (May 22) and closing on May 27.
Among the IPOs, TBO Tek Ltd received the highest subscription at 86.69 times, followed by Indegene Ltd at 70.3 times, and Aadhar Housing Finance at 26.76 times. Go Digit General Insurance was subscribed 9.6 times.
Vinod Nair, Head of Research at Geojit Financial Services, noted a rush to list companies ahead of the national election results due to potential short-term volatility. The primary focus of recent IPOs has been to benefit existing shareholders, with about 75 percent of funds raised through the OFS route, excluding Vodafone. Funds from OFS go directly to the shareholders who offered stakes, not to the company.
Investor demand for IPOs remains strong due to buoyant market sentiment, and fund-raising is expected to continue given India’s strong growth outlook. However, a short-term slowdown might occur if the election outcome is weaker than expected, according to Nair.
In May, the Sensex and Nifty dipped by 0.7 percent and 0.4 percent, respectively, while the BSE MidCap and SmallCap indices saw losses of 2.5 percent and 1.2 percent, respectively.
In 2024, 29 IPOs have raised Rs 27,650 crore so far, a stark contrast to the first five months of 2023, which saw only five IPOs raising just over Rs 5,800 crore, with no offerings in January and February.
