India has become a standout hub for equity fund-raising in 2024, with over US$16 billion raised through IPOs so far—second only to the US. This momentum is fueled by a combination of robust economic growth, improving market liquidity, and strong domestic and international investor interest.
Key Factors Behind the Fund-Raising Boom:
- Broad-Based Activity: IPOs, qualified institutional placements, and block deals are happening across diverse sectors—from manufacturing to new-age tech firms, profitable businesses to those on the path to profitability.
- Economic Strength: India remains the fastest-growing major economy, with GDP growth forecast at 6.5% in 2024 and 5.8% in 2025. Its large domestic market and favorable positioning in the global supply chain realignment make it attractive to investors.
- Record IPO Pipeline: With 18 IPOs already approved for 2025 and 62 more awaiting nods, India’s equity capital markets are poised for continued vibrancy, albeit with natural fluctuations due to market conditions.
- Retail Investor Participation: Systematic investment plans have contributed $2-3 billion in monthly inflows to mutual funds, boosting liquidity and investor appetite for IPOs.
- Attractive IPO Returns: IPOs have delivered average returns over 30% year-to-date, outperforming broader indices like the BSE Sensex.
Risks and Market Dynamics:
- Market pullbacks due to geopolitical risks or IPO performance mismatches are natural parts of the market cycle. Such cooling-off phases tend to be temporary as investor confidence restores.
- Investors show preference for market leaders with clear profitability trajectories and relatively lower competition.
In sum, India’s equity fund-raising landscape is benefiting from strong fundamentals, diversified issuance, and active investor participation, signaling a robust growth trajectory ahead.
