Driven By SME IPOs, India Leads Global IPO Chart With 80 Listings Till June 2023: Report

Driven By SME IPOs, India Leads Global IPO Chart With 80 Listings Till June 2023: Report

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Defying global trends, the stock exchanges of India have topped global rankings in terms of the number of initial public offers (IPOs). As per a report by Ernst and Young, the BSE and the NSE have jointly listed 80 firms till June 2023, which is 33 per cent higher than the 60 IPOs floated a year back. The data showed that fresh IPOs helped the country continue to widen its stake in the global IPO pie, from 6 per cent in 2021 to 11 per cent in 2022, and further to 13 per cent year-to-date in 2023.

“Defying the global downward trend, India exchanges have sustained a vibrant IPO market with 80 listings in YTD 2023, a 33 per cent increase over the 60 IPOs in 1H 2022, and tops the global stock exchange ranking by number of IPOs. The surge is largely due to SME IPOs showcasing the underlying entrepreneurial activity,” the EY Global IPO Trends Q2 2023 report said. The research agency covered IPOs completed from January 1, 2023, to June 19, 2023, along with anticipated IPOs expected to take place by June 30, 2023. 

As per the report, globally, in the first half of 2023, there were over 600 Initial Public Offerings (IPOs) that raised around $60 billion. However, this represents a decline of 5 per cent in the number of IPOs and a 36 per cent drop in their value compared to the same period last year. This is attributed to slower global economic growth, strict monetary policies, and geopolitical tensions.

As per the report, the Americas region’s share of global IPO proceeds declined from 38 per cent in 2021 to just 5 per cent in 2022 but showed some improvement, rising to 15 per cent in YTD 2023. On the other hand, the Greater China region continues to dominate global IPO activities, and Indonesia is experiencing strong momentum due to the global demand for its mineral resources for the electric vehicle (EV) sector and the growth of unicorns.

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As for India, the report that although funds raised till June 2023 totaled around $2.1 billion. This is still 62 per cent decline compared to the fund raised in the same period last year. However, Q2 saw a shift towards larger deals than Q1, mostly from the industrials, health and life sciences, and technology sectors, including a fundraising of $638 million in April by an emerging asset class relating to an infrastructure investment trust.

“After a slow start to the year, IPO activity could rebound in the second half. With major risk factors fading, volatility back to a reasonable level, and interest rate hikes priced in, IPO-bound companies are seeking the right window with higher market liquidity,” said Martin Steinbach, EMEIA IPO Leader for EY.

“Investors are becoming more selective, taking advantage of a buyer’s market,” he pointed out.

Globally, there has been an improvement in IPO activities in the second quarter when compared with the first quarter of the year, and Q2 (June quarter) is on par with the year-ago period. There were 310 public issues in Q2 with proceeds totaling $39 billion. This was down 5 percent from the last year.

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