IPO Flood: Increase in Public Offerings in Indian Markets

Moneylife Digital Team 02 October 2024

Investor Interest

The Indian financial market is gearing up for a surge in initial public offerings (IPOs) in the coming months, with the Securities and Exchange Board of India (SEBI) approving several large-scale IPOs during the ongoing festival season. Among the most significant is Hyundai Motor India's Rs25,000 crore IPO, set to be the largest in Indian history, surpassing LIC's previous record of Rs21,000 crore. This IPO is entirely an offer-for-sale (OFS) by Hyundai's parent company.

Swiggy, the popular food delivery platform, is also preparing for its IPO, aiming to raise Rs10,414 crore through a fresh issue of Rs3,750 crore and an OFS component. The company has already filed its updated draft red herring prospectus (DRHP). Similarly, NTPC Green Energy, a subsidiary of NTPC, is set to launch a Rs10,000 crore IPO. The company is planning roadshows in Mumbai, London and the United States to attract investors ahead of its November IPO.

In addition to these big players, a variety of companies have filed their draft papers with SEBI contributing to the ongoing surge in IPO activity. Among the companies that filed on Monday, are Vikram Solar, Aditya Infotech, Varindera Constructions and others, spanning a range of sectors.

Vikram Solar, a solar module manufacturer, is planning an IPO comprising fresh equity issues worth up to Rs1,500 crore and an OFS of up to 1.74 crore shares by its promoters. The capital raised will fuel the company's expansion plans and enhance its position in the renewable energy market.

Aditya Infotech is looking to raise Rs1,300 crore, including a fresh issue of Rs500 crore and an OFS of Rs800 crore by the promoters. This move will help the company retire debt and fund its growth in the technology and services sector.

Varindera Constructions is eyeing a Rs1,200-crore IPO, with a fresh issue of Rs900 crore and an OFS of Rs300 crore by the promoters, aimed at expanding its infrastructure and EPC (engineering-procurement-construction) operations across India.

Vikran Engineering, another infrastructure EPC firm, is planning an IPO of Rs1,000 crore, with a fresh issue of Rs900 crore and an OFS of Rs100 crore by the promoter, to fund its project development and working capital needs.

These companies, along with others that filed on Monday, aim to raise at least Rs8,000 crore collectively.

Over the next 60 days, more than six companies, including Hyundai Motor India, Swiggy, and NTPC Green Energy, are expected to raise a combined Rs60,000 crore through their IPOs. Other companies, such as Vishal Mega Mart, with its Rs8,400 crore IPO, and Acme Solar Holdings, are planning a Rs3,000 crore issue, highlighting the diverse range of sectors participating in this IPO wave.

Additionally, Mamata Machinery is preparing for a secondary share sale of 7.3mn (million) shares.

The increase in IPO activity is expected to bring substantial capital into various sectors of the Indian economy, including automotive, food delivery, renewable energy, and retail, potentially stimulating growth across industries. However, as the market becomes more crowded, investors will need to carefully evaluate each offering before making investment decisions.

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