Illustration: Ajay Mohanty3 min read Last Updated : Sep 27 2024 | 12:10 PM ISTPrimary market, it seems, is not only luring investors back home but also globally.
A recent report by GlobalData, a London-based data analytics firm suggests that 822 Initial Public Offers (IPO) aimed to raise $65 billion in the first eight months of calendar year 2024 (CY24) till August.
This is a 17.4 per cent jump from 2023 when 1,564 listings during the same period planned to mop up $55.4 billion via this route.Investors, the report suggests, are shifting towards larger, more valuable IPOs at the global level despite the reduced number of listings thus far in 2024.Click here to connect with us on WhatsAppThere has been a noticeable shift in investor focus over the past two years, with greater emphasis on the financial sustainability and profitability of newly listed companies.
This change signals a more discerning approach from investors, given the backdrop of tighter monetary conditions and persistent market uncertainties, the report said.India IPO market tops APAC tallyThe Asia-Pacific (APAC) region recorded the largest number of transactions, totaling 575, amounting to $23.7 billion in value, while North America had 149 deals valued at $25.4 billion, GlobalData said.India toped the APAC region with 227 transactions totaling $12.2 billion in the first eight months of 2024, the report said, primarily due to a higher number of small - medium enterprises' (SME) IPOs.
The US came in second with 133 deals of $23.1 billion, while China ranked third with 69 transactions worth $5.3 billion, the report suggests.The IPO market underwent a significant uptick in activity in 2024 as macroeconomic conditions stabilized and there was a resurgence in private equity and venture capital-backed listings.
Investor sentiment towards equities, particularly IPOs, continued to improve, buoyed by the strong aftermarket performance witnessed in 2023, said Murthy Grandhi, company profiles analyst at GlobalData.The sectors leading the way in IPO activity globally thus far in 2024 according to the GlobalData report were technology and communications, registering 135 transactions with a total value of $6.4 billion, followed by financial services with 113 deals ($11.6 billion), construction with 79 transactions ($3.9 billion), and pharmaceuticals and healthcare with 75 deals ($7 billion).At the global level, companies planning for IPOs, Gandhi said, are now increasingly prioritising revenue growth, profitability metrics, and sustainable business strategies, reflecting a broader trend towards long-term financial resilience and responsible growth.Going ahead, the IPO market, he believes, will continue to be influenced by a complex set of factors, including shifts in monetary policy, geopolitical developments, and evolving investor preferences."Amidst these, companies that demonstrate strong financial fundamentals and clear growth can appeal to an increasingly selective investor base.
The ability to showcase resilience and long-term sustainability will be key for businesses seeking to attract capital in this evolving market environment, he added.In the Indian context, a clutch of companies that includes auto major Hyundai Motor India, Swiggy, Hexaware Technologies, NTPC Green Energy, Afcons Infrastructure, Tata Play, and Vishal Mega Mart aim to raise nearly Rs 60,000 crore via IPOs over the next few months.First Published: Sep 27 2024 | 12:09 PMIST