EY Report Highlights 61% Surge in Funds Raised Through IPOs in India for 2020

The latest report from EY reveals a significant rise in funds raised through initial public offerings (IPOs) in India, with a 61% increase last year, reaching over $4.09 billion. This surge occurred despite a 33% drop in the number of IPOs, which totalled 43 in 2020 compared to the previous year.

In the final quarter of 2020, IPO activities experienced a notable recovery, and market sentiment remained optimistic. The real estate, hospitality, and construction sectors were particularly active, each launching three IPOs across both main and SME markets. The life sciences sector saw the largest IPO from Gland Pharma Ltd, raising $869 million.

Sandip Khetan, Partner and National Leader of Financial Accounting Advisory Services at EY India, noted the strong momentum in IPO markets. He highlighted an increasing interest from companies across various sectors aiming to raise capital soon. Khetan also mentioned that firms are eagerly awaiting guidelines for direct listings in overseas markets.

According to the report, Indian stock exchanges BSE and NSE, including SMEs, ranked ninth globally for the number of IPOs in 2020. Notably, there were no cross-border deals during this period. The main markets saw ten IPOs in Q4 2020 compared to five in Q4 2019 and four in Q3 2020.

The SME markets also showed increased activity with nine IPOs in Q4 2020, up from six in Q4 2019 and four in Q3 2020. This growth reflects a positive outlook for the upcoming year. "The market sentiment remains positive for what could be a stellar 2021," Khetan stated.

The EY report underscores the resilience of India's IPO market amid challenging conditions. With sectors like real estate and life sciences leading the charge, there is optimism for continued growth. The anticipation of new guidelines for overseas listings further fuels this positive outlook.