Diwali, the festival of lights, is being celebrated today by Indians nationwide. It is a festive occasion that unites families and communities in a colourful exhibition of customs and culture. Additionally, the new Hindu calendar year, Samvat 2081, begins today.
Investors in the stock market have yet more reason to rejoice when this festival is observed. Samvat 2080 saw the Indian stock market surpass all forecast projections, set new records, and accomplish amazing milestones. Despite the steep decline in October, the Indian frontline indices ended the year with nearly 25% gains.
With a surge of businesses listing their shares on Dalal Street, the primary markets saw the majority of activity throughout the past year. Many businesses have been prompted by increased retail participation to raise money through the financial markets, taking advantage of the advantageous circumstances to attract investors.
SME IPOs have garnered a lot of retail interest, especially since so many smaller businesses that went public this past year received overwhelmingly positive feedback. These IPOs attract retail investors who are looking for significant returns and the opportunity to work with businesses that are just starting. The market regulator, SEBI, has even issued many advisory advising prudence in response to this surge of demand.
Offer-for-sale (OFS) transaction volumes have also increased, and venture capital (VC) and private equity (PE) investors are seizing the chance to withdraw through both main (IPO) and secondary (block deal) market channels. PE firms have intentionally sold off some or all of their holdings, taking advantage of the secondary market’s positive conditions.
Small investors have, big impact
India’s primary market, which was formerly controlled by institutional investors, is currently undergoing a dramatic change as demand is being driven by retail involvement as a result of the attraction of high yields and convenient access to financial markets. An SME IPO that hasn’t been fully subscribed for in the retail category has grown more and more uncommon over the previous 12 months.
According to the most recent CDSL data, the number of registered demat accounts in India has already surpassed 17 crore, indicating that the IPO frenzy has greatly increased the number of investors. In recent months, ordinary investors have opened an average of 40 lakh demat accounts per month.
Samvat 2080 has seen a significant oversubscription of many items, with some retail sections reaching up to 2,000 times the available bids.
New-age tech firms have also had a busy year; companies like Ola Electric, TBO Tek, Awfis, and Go Digit have made big moves on Dalal Street. For multinational firms looking to go public, the Indian capital market has emerged as a top choice.
In October, Hyundai India debuted on the Indian market. The market’s increasing appeal on a global scale is further highlighted by news that LG and several other foreign companies are getting ready to go public in India.
With a growing portion of capital formation and the investment landscape propelled by technology, innovation, and digitisation, capital markets are currently playing a critical role in India’s progress.
336 companies join Indian bourses
According to Trendlyne data, 336 companies had their stock market debuts in Samvat 2080, with 248, or 74%, coming from the SME group, amid intense demand from retail investors.
Of these initial public offerings (IPOs), 132 saw subscription rates above 100%, with HOAC Foods India leading the way with an amazing 1,834-times subscription rate. Nearly 100 of these IPOs began with listing gains exceeding 50%.
Interestingly, 163 initial public offerings are now trading higher than their issue prices. Owais Metal and Mineral Processing is one of the top performers, trading 1,416% higher than its initial public offering (IPO) price. Australian Premium Solar (India) is next, up 766% from its issue price.
The exchanges took notice of the extraordinary listing profits and, beginning in June, set a 90% listing gain cap. According to SEBI data, the market has expanded significantly since the SME platform was introduced on stock exchanges in 2012, raising over ₹14,000 crore over the previous ten years, including over ₹6,000 crore in 2023–2024 alone.
SME IPOs are frequently valued highly, according to certain experts. While some people base their investment decisions on the reputation and performance history of the merchant bankers involved, ordinary investors are primarily focused on possible listing day rewards rather than valuations.
In the meantime, 88 firms from the main board segment debuted on exchanges. The greatest IPO in terms of issue size was that of Hyundai India, a Korean automaker that was able to raise 27,870 crore from Indian investors. Aadhar Housing Finance, Brainbees Solutions, Waaree Energies, Ola Electric Mobility, and Bajaj Housing Finance are a few other noteworthy initial public offerings.
Vibhor Steel Tubes had the greatest subscription rate (298 times) among major board IPOs, and subscription rates above 50% were observed in 49 other IPOs.
Vibhor Steel Tubes was the company with the most listing gains, with shares debuting 195.5% higher than their issue price. With shares listing at a gain of 171.1%, BLS E-Services also enjoyed a strong debut. Tata Technologies’ shares, meanwhile, were listed at 162% higher than their issue price.
Given the success of several listings in the previous year, the Indian IPO market is expected to have a bright future in Samvat 2081 as more businesses look to investors for funding. The economy’s high interest rates are also anticipated to support fundraising efforts.
