Buoyant secondary markets, strong participation of retail investors, and robust flows from institutional investors helped 76 companies in raising nearly Rs 62,000 crore through mainboard IPOs in 2023-24, marking a 19 per cent surge from the previous fiscal year. With FY2025 on the horizon, expectations are high for yet another stellar year for IPOs (Initial Public Offerings). This optimism is fuelled by a confluence of factors, including the surge in domestic capital, enhanced governance practices, the vibrant spirit of Indian entrepreneurship, and favourable government policies bolstered by FDI support, Pantomath Financial Services Group, said in its report.

“With a diverse array of offerings and a fervent appetite for growth capital, the IPO landscape in FY2025 promises to be dynamic and vibrant, offering exciting opportunities for investors and companies alike. We anticipate that equity-raise through IPOs in FY25 could exceed Rs 1 lakh crore. This figure could potentially increase even further if there are no global shocks affecting the Indian market,” Mahavir Lunawat, Managing Director, at Pantomath Capital Advisors, said.

According to the report, a total of 76 companies garnered close to Rs 62,000 crore through main-board IPOs in 2023-24, which was way higher than Rs 52,115 crore mopped up by 37 companies in the preceding fiscal.

Interestingly, companies from multiple sectors tapped the IPO market in FY24. However, the traditionally dominant financial sector, demonstrated restrained activity, raising Rs 9,655 crore, which accounted for less than a fifth of the total capital raised in FY24, in comparison to 51 per cent in 2022-23.

Further, new-age technology companies were also few, with just three IPOs of Yatra, Mamaearth, and Zaggle hitting the market in the last fiscal.

Overall, the average first-day gains stood at 29 per cent in FY24 against 9 per cent in the previous financial year. Meanwhile, over 70 per cent or 55 stocks are still trading above their issue price. The gains can be attributed to several factors such as buoyant secondary markets, enthusiastic participation of retail investors in IPOs, and strong flows from institutional investors. The response of retail investors was higher compared to the previous financial year. The average number of retail applications rose to 1.3 million from about 0.6 million in the previous financial year. This was due to strong post-listing performance.

Meanwhile, data compiled by prime database showed heightened activity in the (Small and Medium Enterprises) SME IPO activity. The segment saw a huge increase in 2023-24 with 200 SME IPOs mobilising Rs 5,838 crore, as compared 125 IPOs raising Rs 2,235 crore in the preceding fiscal. The largest SME IPO was of KP Green Engineering that collected Rs 180 crore.

In FY24, the NSE’s benchmark index Nifty 50 ended the session with a 29 per cent surge, and the Nifty Smallcap 100 and the Nifty Midcap 100 index gained 70 per cent and 60 per cent, respectively.

The S&P BSE IPO Index, a gauge tracking the after-listing performance of newly listed companies, jumped 69 per cent this financial year. The rally in the small and midcap segments has also benefited newly listed stocks because most belong to this basket.