Indian Companies Collect INR 728 Bn via IPOs in Jan-Sep 2021

Recently EY published a global IPO trends report studying and analysing the offering across the world. The reports revealed some record-breaking numbers for India. Considering the nine months from January to September 2021, over 70 companies have offered shares raising over INR 728 billion from the public.

Out of that, between July-September 2021 itself, there were 31 offerings. And a collection from these offerings was INR 375 billion. More than half of the nine-month collection was seen in the last three months.

What does EY’s Global IPO Trends Report say?

The reports say that major bullish sentiments have led the IPO demand so high allowing it to hit the highest number in 20 years. Indian indices have touched new heights during this period and it is very much visible from the rise in demand.

During this period, some of the offerings did extraordinarily well. One of the major blockbuster offerings was sold by Zomato, the leading online delivery and restaurant listing company.

As per the reports, offerings across the world kept doing equally well till September 2021 giving the highest number of IPOs in the past two decades.

Worldwide, the July-Sep quarter marked a record in 2007. This year the corresponding period between July-Sep witnessed one-fifth of extra offerings.

July-Sep 2021 marked 545 offerings worth more than USD 100 billion. And since Jan-Sep, over 1600 offerings have been sold across the world’s leading financial markets, worth USD 330 billion. On a YoY basis, these numbers have seen a growth of 90% to 100%.

According to the reports, 2021 has by far crossed the total offerings and total collection of 2020 via IPOs. Still, there are three more months to go before 2021 ends.

The consultancy firm also witnessed that the major push in the July-Sep quarter was because of the recovery seen in financial markets of EMEIA countries. Even Tel Aviv was seen picking pace while the trend was on.

Comparison with historical data

The industry experts believe that the past three months have been very booming for the IPO side. This has been the most happening three-month period since the beginning of 2018.

The highest number of offerings in three quarters was seen in 2018 with over 129 offerings. In terms of the number of offerings, this record is still intact as the current period has seen 70+ offerings so far.

The sectoral analysis of these numbers in the reports further revealed that out of total offerings since Jan 2021, more than 10 belonged to FMCG whereas 15 belonged to companies with vivid products.

The last week of September gave a record new highs in Nifty 50 and Sensex. While the former almost touched the 18K mark, the latter moved past mount 60K. This reflected bullish sentiments during the past few months.

The road ahead

The reports also noticed that global investors have optimism in businesses that have unique pursuits, upright values, and ethical governance. A similar pattern is visible in the sentiments of local investors as well.

As per the industry experts, the viewpoint for the remaining months before 2021, is optimistic as many more offerings are on their way. Markets trading close to their lifetime high shall provide additional support to the upcoming IPOs.

FAQs

What is an initial public offering?

Initial public offering aka known as IPO is a process by which companies raise capital from the public at large by issuing shares to them. While the purpose of a company to go public is fundraising, investors look at it as an opportunity to invest for future growth.

How many months are counted in Year to date (YTD)?

YTD stands for Year-to-date. This is a common term used in interim financial reports. YTD  is the period between the first day of the year to today’s date. Based on which year is followed, financial year or calendar year, the first day of the year varies. In Indian financial statements, it is usually from 1st April but globally it starts from 1st January as they follow the calendar year globally.

Which are the major sectors in the Indian stock market?

Some of the major sectors in the Indian stock market are banking and finance, IT, automobiles, oil and gas, metals, pharmaceuticals, healthcare, FMCG, chemicals, etc. There are sector indices in NSE and BSE to track the sector-specific performance.