Initial public offerings (IPO) activity in India jumped massively in the January-March period of 2021, fuelled by ample liquidity, robust demand and investor appetite. On the BSE and NSE, there were 17 IPOs in Q1CY2021 as compared to 1 IPO in the same period last year and 10 IPOs in Q4CY2020.

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As regards SME markets, there were 5 IPOs in Q1 2021 versus 11 and 9 IPOs in Q1 2020 and Q4 2020, respectively, representing a decrease of 55 percent and 44 percent as compared to Q1 2020 and Q4 2020 respectively.

India ranks ninth globally in terms of the number of IPOs year-to-date (YTD), according to EY India IPO Trends Report: Q1 2021.

Source: EY India IPO Trends Report: Q1 2021

Consumer products and retail, diversified industrial products, automotive and transportation were the most active sectors in the number of IPOs with five IPOs each in the former two sectors and four in the latter sector including the main and SME markets.

In terms of the issue size, an IPO by Indian Railway Finance Corp Ltd from the banking and capital markets sector was the largest in Q1 2021.

Source: EY India IPO Trends Report: Q1 2021

“We are witnessing high momentum in the Indian capital markets. A significant amount of activity is driven by huge dry powder awaiting investment and companies exploring a listing in India or overseas. The markets continue to reward companies with robust, scalable and technology-led business models.” said Sandip Khetan, Partner and National Leader, Financial Accounting Advisory Services (FAAS), EY India.

Meanwhile, the IPO pipeline has over 20 companies that have filed their Draft Red Herring Prospectus (DRHPs) and more than 30 PE-backed companies planning exits. InvITs worth almost US$5 billion are also in the pipeline.

SEBI has eased norms for start-up companies, minimum public offer and required public shareholdings for large issuers.

However, according to the report, there are reasons for caution in the near term, given the slow start to vaccinations in India relative to the size of the population, renewed spike in COVID-19 infections with the second wave and threats from new variants of the virus.

(Edited by : Ajay Vaishnav)

First Published:Apr 22, 2021 5:20 PM IST