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Indian Stock Exchanges Emerge as Global Leaders in IPO Volume for 2023: An Insightful EY Report Analysis

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Indian Stock Exchanges Claim Global Leadership in Number of IPOs for 2023, Reveals EY Report

The Indian stock exchanges, spearheaded by the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), have etched their names as frontrunners on the global stage for the year 2023, according to an enlightening report by EY. This report sheds light on the pivotal trends that have shaped the IPO landscape in the fourth quarter of the calendar year 2023, highlighting the vibrancy and dynamism of India’s primary markets.

Vibrant Activity in Primary and SME Markets

In a remarkable showing, the BSE and NSE combined have witnessed an impressive flurry of Initial Public Offerings (IPOs), cementing their position at the pinnacle of global rankings in terms of IPO volume. The report emphasized an absence of cross-border transactions, underscoring the domestic market’s strength and appeal.

The concluding quarter of 2023 saw the primary markets rejoice with 31 IPOs, including one Infrastructure Investment Trust (InvIT), showcasing a robust uptick from the corresponding periods in the previous year and the third quarter of 2023. The tally reflects a splendid 72% surge over the fourth quarter of 2022 and a commendable 41% growth from the preceding quarter.

Parallelly, the Small and Medium Enterprises (SME) segment registered unprecedented growth, hosting 61 IPOs in the fourth quarter of 2023. This marks a noteworthy rise from the 34 and 47 IPOs unveiled in the fourth quarter of 2022 and the third quarter of 2023, respectively, illustrating a strong and growing investor confidence in the SME sector.

Optimistic Outlook for the Future

“With investor sentiment riding high, backed by a burgeoning economy and anticipation of easing inflation and interest rate cuts in 2024, we foresee the Indian IPO market maintaining its momentum. This optimism is expected to not only augment the number but also enhance the average size of IPOs in the mainboard and SME domains,” shared Adarsh Ranka, Partner and Head of Financial Accounting Advisory Services at an EY Global member firm.

The remarkable surge in IPO activity, particularly in the second half of the year, has been instrumental in making the fourth quarter of 2023 a landmark period—accounting for nearly 40% of the year’s total IPO registrations. An optimistic sentiment permeates the market, with over 18 companies having filed their Draft Red Herring Prospectus (DRHP) in this quarter alone, hinting at a promising 2024.

Active Sectors and Notable Developments

The report brings to light the sectors that have been buzzing with IPO activity. Energy and utilities, healthcare, automotive and transportation, and banking and capital markets emerge as sectors of significant activity, as evidenced by recent DRHP filings. Another notable development is the recent amendment by SEBI to the Real Estate Investment Trust Regulations, allowing the establishment of small and medium-sized real estate investment trusts (SM REITs), which is expected to spur further growth and innovation in the real estate sector.

The consumer products and retail, diversified industrial products, automotive and transportation, and technology sectors have also shown significant IPO activity during the fourth quarter of 2023. Leading the charge in terms of issue size was Tata Technologies Limited, with the largest IPO of the quarter, valued at $0.37 billion.

As the Indian stock exchanges continue to build on their impressive performance, the primary and SME markets are set to embark on new trajectories of growth and success, guided by positive investor sentiment and favorable economic conditions. The year 2023 stands as a testament to the resilience and dynamism of India’s IPO market, promising exciting times ahead for investors and companies alike.

Natalie Kimura
Natalie Kimurahttps://www.businessorbital.com/
Natalie Kimura is a business correspondent known for her in-depth interviews and feature articles. With a background in International Business and a passion for global economic affairs, Natalie has traveled extensively, providing her with a unique perspective on international trade and global market dynamics. She started her career in Tokyo, contributing to various financial journals, and later moved to London to expand her expertise in European markets. Natalie's expertise lies in international trade agreements, foreign investment patterns, and economic policy analysis.

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