IPO Trends: What to Expect in the 2023 Market

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The 2020-21 IPO market was booming, at least compared to the time after this. Since 2021, the IPO market has been slack and any upcoming IPO doesn’t seem to thrill investors like it used to. Geopolitical uncertainty, market volatility, and rising interest rates are just some factors that have tampered with the enthusiasm for IPOs (initial public offerings). Some IPOs have been high-profile and have garnered interest, but the percentage trading over the issue price has gone down. This has resulted in less optimism in the IPO market.

Upcoming IPO – Indian IPOs in 2023

Thankfully there is a healthy group of companies that have launched IPOs in the recent past in India. The global scene may look less positive for IPOs, but in India, the stability in rates of interest and the economy will decide the movement of IPOs. The trend, as of now, appears more positive than negative, in terms of the volumes of IPOs coming out.

In IPO list 2023, a string of IPOs have launched, and not just retail investors, but corporate investors, have shown keen interest in investing. Compared to 2022, 2023 has witnessed a tidal wave of IPO introductions and this has been given a boost with indications of a healthy economy and a strong economic recovery in India. In the third quarter of the 2023 financial year alone, India has seen more than 30 main board IPO listings and this excludes smaller SME listings (according to the Ernst & Young Global IPO Trends Report 2023). The rise in the IPO movement has been enhanced by large companies, established businesses, and prospective startups on the positive path to growth and expansion.

IPO Rising Market Trends

IPO trends seen in 2023 may not be as positive as those of 2020-21, but there is clearly a trend that is veering towards the positive side of the market. Recently, the stock market has seen frenzied movement with unprecedented rises and investor optimism. IPO trends are riding on this broader stock trend with retail investors, promoters, corporates, and private equity players attempting to grab favourable opportunities in about-to-turn public companies.

Additional Read:How to Evaluate and Choose the Right IPOs

The huge rush to the public stage is not just about companies wanting to raise capital via the IPO route. It also has to do with the high valuations that are motivated by positive market sentiment. So, seasoned players and novices are all being drawn to IPOs in recent times. The high valuations attract early investors as well as promoters to cash out with their holdings. They may do this in part or whole. Contrastingly, investors get a boost from the current track record that IPOs boast of, listing at positive premiums relative to the issue price. As far as companies go, they find that IPOs offer the opportunity to raise capital, even if they do not really need to raise funds. Any upcoming IPO is leveraged due to the positivity of the market outlook (short to mid-term).

Positive IPO Trends into 2024

As the current IPO market shows buoyancy, this is expected to continue into 2024, especially since this mood is boosted by the general elections. Experts believe that it is only natural for markets to offer favourable conditions for any companies that are freshly listed. Nonetheless, experts warn of a bearish sentiment following such a heightened bull run. Still, certain companies have capitalised with their IPOs and the market’s present bull run. The following companies have recently come out with IPOs that have seen the positivity of the markets:

  • Tata Technologies Limited
  • IdeaForge Technology Limited
  • Indian Renewable Energy Development Agency Ltd
  • Utkarsh Small Finance Bank Limited

Additional Read: Upcoming IPOs in India in 2024

Overall Indian Upcoming IPO Trends

With the EY Q3 Trends Report confirming the success of Indian IPOs, it is no surprise that news on the ground level in terms of Indian IPOs states that India is the global leader in IPOs in 2023. In Q3 2023, there were 21 IPOs relative to just four at the same time in 2022. The market is obviously on the path to rewarding those companies with strong business models and well-managed businesses. In the upcoming quarters, more than 25 businesses plan to float IPOs with this positive run-in mind. This will go well into H2 2024. Besides big businesses cashing in on the successful momentum of their IPOs, Small and Medium Enterprises (SMEs) are also taking the chance to become the public companies of tomorrow, raising huge amounts of capital with their IPOs in Q3.

The IPO Future

The Indian IPO future, as of now, looks positive from all angles with predictions of this landscape witnessing rises in IPO activity. Not only are the IPOs coming out rapidly, but so are the investors and this is what makes the IPO market fast and furious. There seems to be a drive to tap into the capital markets as well as an urge to take advantage of healthy economic conditions. The domestic market sentiment is positive in general, and the foreign sentiment towards the Indian economy is positive too, motivating an overall optimistic phase for Indian IPOs.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only.

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