The Indian initial public offerings market stayed stable in the initial quarter of 2023, and main fundraising activity is likely to pick up in the second half of the year. In Q1 2023, there were four IPOs, one more than in the same time last year. The largest IPO till March was Divgi TorqTransfer Systems, which raised approximately $50 million.
Mankind Pharma's Rs 4,300 crore initial share sale, the largest so far this year, was well received, with the issue being purchased up to 15 times at closing. total IPO fundraising fell 89% year on year to $107 million in Q1 2023, in keeping with global experience of smaller offering sizes.
However, India remained the leader in terms of IPOs during the first quarter, owing largely to small-ticket IPOs. The SME category raised $82 million with 38 IPOs in Q1 2023, compared to 31 IPOs in Q1 2022, which raised $37 million, marking a 23% increase in the number of deals and a 123% increase in revenues raised.
Approximately 15 companies filed DRHPs during the specified period, compared to around ten firms that filed DRHPs the previous year. These corporations come from a wide range of industries, including consumer goods, healthcare, technology, and financial services.
In the previous quarter, however, nearly a half-dozen companies have withdrawn their IPO files owing to market conditions, or the regulator SEBI returned the offering documents. While the reasons for returning these offer documents vary, the regulator requires companies to be fully compliant when they file.
"Due to continuing worldwide risks and a relatively smaller issue size, the India IPO market demonstrated durability and growth in Q1 2023." The market's strength demonstrates the Indian economy's potential for expansion. We anticipate an upsurge in initial public offerings activity in the future, with both domestic and foreign investors playing major roles," said Veenit Surana, Partner at EY India.
