IPOs 2023: The year of the market debutants

• The cumulative issue size has also grown from Rs 16,754 crore in 2018 to Rs 1,38,894 crore in 2021-22.
• India’s IPO boom can be attributed to India's strong economic growth, which is estimated to be 6.5-6.6%, much higher than the global average of 3%.
• Globally, the IPO market has also been gaining momentum, with an increasing number of IPOs listed across countries.
  

Primary markets are not for the faint-hearted, but in India investors cannot have enough of IPOs (initial public offerings). This trend has really caught on over the last five years. The IPO market has expanded significantly in the last five years, with the number of issues almost doubling during this period. According to analysis done by the economics team of Bank of Baroda, the cumulative issue size has also grown from Rs 16,754 crore in 2018 to Rs 1,38,894 crore in 2021-22. This indicates a growing demand for equities and reflects investors' confidence in the financial market.

In 2023, the IPO market continued to show strong performance, with a cumulative issue size of Rs 37,768 crore and over 200 companies participating across industries. The industries that have been the biggest contributors in terms of issue size include pharmaceuticals, trading, port, hospital & healthcare services, and retail sector.

In India, the IPO market in 2022 saw a cumulative issue size of Rs 55,638 crore, with 151 companies participating across industries. Industries such as insurance, edible oil, courier service, and textile were the biggest contributors in terms of the issue size. Of the 93 firms with IPO listings in 2022, over 76 firms registered listing gains, while 16 were listed at a discount.

According to BoB, India’s IPO boom can be attributed to India's strong economic growth, which is estimated to be 6.5-6.6%, much higher than the global average of 3%. The country's stable political climate and strong macroeconomic conditions have made it an attractive destination for investors, especially amidst the uncertainty in the global landscape and geopolitical tensions.

Globally, the IPO market has also been gaining momentum, with an increasing number of IPOs listed across countries. In 2021, a total of 2,436 IPOs were listed globally, resulting in total proceeds of $460 billion. This indicates a rapid demand by investors and their affinity for the primary market.

Industries such as pharma, insurance, healthcare, edible oil, and textile have contributed the most to the IPO market in the last few years. However, BoB’s report also cautions that the euphoria in the IPO market needs to be seen with caution, as it remains to be seen if it will continue in the upcoming election year.

Overall, the IPO market in India has witnessed significant growth and investor interest in recent years. With a strong economy and favorable market conditions, the IPO market is expected to continue its upward trajectory.

Tata Technologies, a Tata group company, made a remarkable debut on the stock exchanges, providing its investors with a whopping 162% listing gains. The stock listed at ₹1,314, which was significantly higher than its issue price of ₹500 per share. This surge in price resulted in a market capitalization of ₹53,314 crore, according to the Bombay Stock Exchange.

The IPO of Tata Technologies garnered immense interest from investors, with the issue being subscribed 69 times over. The QIB portion of the issue saw a subscription of 200 times, while the non-institutional and retail investors' quotas were subscribed 62 times and 16 times, respectively. This overwhelming response indicates the strong demand for the stock.

The grey market had anticipated listing gains of around 75%, but Tata Technologies surpassed expectations by delivering 162% gains. This exceptional performance has positioned it among the dream debuts of this year, alongside IdeaForge and Netweb Technologies.

Analysts believe that Tata Technologies' well-established business model and the reputation of the Tata brand have contributed to the stock's popularity. The company's focus on engineering R&D further adds to its appeal.

The year 2023 has witnessed several stellar IPO listings, with IdeaForge Technology recording gains of 94%, Netweb Technologies at 89%, and Aeroflex Industries at 83%. Following closely behind are Vishnu Prakash R Punglia, Utkarsh Small Finance Bank, and Cyient DLM.

Overall, Tata Technologies' remarkable debut and significant listing gains have generated substantial buzz in the IPO market.