The investment banking sector in India is set to witness a significant surge in fundraising activities through initial public offerings (IPOs) and qualified institutional placements (QIPs) in the upcoming fiscal year. Experts in the industry are forecasting that the total amount raised could reach a record high of ₹3 lakh crore, surpassing the previous high of ₹1.88 lakh crore recorded in 2021.
The momentum in fundraising has been building over the past few years, with 2021 witnessing a substantial increase compared to the previous year. So far this year, 90 companies have either raised funds or announced plans to raise a total of ₹1.62 lakh crore, marking a significant increase from the ₹49,436 crore raised in the previous year.
A total of 34 companies have already received approval from the Securities and Exchange Board of India (SEBI) to launch IPOs, with plans to raise approximately ₹41,460 crore, while 55 other companies are awaiting regulatory clearance to raise a combined total of ₹98,600 crore. This robust pipeline of companies looking to access the capital markets indicates strong investor interest and confidence in the Indian economy.
Mahavir Lunawat, Chairman of the Association of Investment Bankers of India, has highlighted the growing trend of foreign companies looking to raise funds in India, with notable examples including South Korean conglomerates LG Electronics and Samsung. Additionally, several Indian companies, including subsidiaries of major banks and corporates like HDFC Bank, Hero MotoCorp, and Reliance Industries, are gearing up for IPOs in the near future.
Reliance Industries, led by Mukesh Ambani, is also planning to list its digital and retail subsidiaries in the next fiscal year, following successful fundraising rounds from private equity investors. The high valuation of IPOs has been supported by strong investor demand, with many issuances being oversubscribed. While there may be challenges in valuing new age businesses, the industry is expected to refine its processes as more of these companies list on the exchange.
Overall, the IPO market in India is poised for continued growth, fueled by robust economic fundamentals, investor confidence, and a diverse pipeline of companies looking to access the capital markets. The upcoming fiscal year is expected to be a landmark period for fundraising activities, with a potential record-breaking amount of capital mobilized through IPOs and QIPs.
