India’s Initial Public Offering (IPO) market recorded strong performance in 2016 with 83 IPOs raising $3.8 billion this year, and the activity looks set to remain strong driven by a combination of high investor confidence and regulatory reforms, says an EY report.
According to the quarterly EY Global IPO Trends: 2016 (Q4), the October-December quarter witnessed a robust performance for IPOs in India and this promising trend is expected to reverberate during next year as well. The BSE, National Stock Exchange and SME boards witnessed 83 IPOs raising $3.8 billion altogether in 2016. Globally, entrepreneurial and investor confidence was “challenged” throughout 2016 by heightened political and economic uncertainty. As a result, the number of IPOs in 2016 fell 16% year-over-year to 1,055 and capital raised was down by 33% to $132.5 billion.
India was the standout performer at the country level, recording a 38% increase in deal volume and a 79% surge in proceeds raised, driven by stronger economic fundamentals and a pro-business political regime. “Continuing regulatory reforms and positive investment climate have helped India dominate in terms of number of deals,” Pankaj Chadha, Partner with an Indian member firm of EY Global said, adding that continuous changes in investment climate and further policy improvements like implementation of Goods and Service Tax (GST) could fuel even more demand resulting in need for equity and more action in the IPO market place.
Sectorwise, technology, industrials and healthcare are the top three segments trending globally. In India, new generation sectors like renewable energy are likely to show higher activity in addition to traditional Banking, Insurance and Consumer goods sectors, Vish Dhingra, Executive Director with an Indian member firm of EY Global said, adding that government’s plans to revive strategic public sector disinvestment may further add to market activity in India. “Looking beyond Europe and the Middle East, India is likely to remain the jewel in the crown of IPO activity in EMEIA (Europe, Middle East, India and Africa) in 2017,” the report said. It further noted that with a supportive political backdrop, upbeat economic sentiment, improved business confidence, easing inflationary pressure and stable foreign direct investment inflows, the pipeline is looking solid for 2017.