India IPO Trends Report
EY India IPO trends report is released every quarter and looks at the IPO markets, trends and outlook for the India region. It forms part of our Global IPO trends report.
Key highlights from Q2 2021
- Indian stock exchanges (BSE and NSE including SMEs) ranked 12th in the world in terms of the number of IPOs in year-to-date (YTD) 2021. There were no cross-border deals.
- In the main markets (i.e., BSE and NSE), there were seven IPOs in Q2 2021 versus no IPO in Q2 2020 and 17 IPOs in Q1 2021. This represents an increase of 100% compared to Q2 2020 and a decrease of 59% compared to Q1 2021.
- As regards to SME markets, there were 11 IPOs in Q2 2021 versus four and six IPOs in Q2 2020 and Q1 2021, respectively, representing a increase of 175% and 83% as compared to Q2 2020 and Q1 2021 respectively.
- The IPO pipeline has over 40 companies that have filed their Draft Red Herring Prospectus (DRHPs) and more than 30 PE-backed companies planning exits.
- As per the recent DRHP filings most active sectors are technology, healthcare, and consumer products and retail.
- Consumer products and retail and real estate, hospitality and construction were the most active sectors (in terms of the number of IPOs) with four IPOs launched in the former sector and three in the latter sector (including main and SME markets). In terms of the issue size, an IPO by Sona BLW Precision Forgings Ltd from the Diversified industrial products sector was the largest in Q2 2021.
In the wake of strong global IPO market activity over the past few months, Indian markets continue to reach new highs. The strong momentum seems to continue with several companies planning for an IPO later this year. Detailed regulations for direct overseas listing are much awaited as they are expected to provide further impetus and opportunities for Indian companies. They may also facilitate better benchmarking between peers, promote best practices and increase cross-border collaboration.
We have witnessed mega filings by new age tech companies in recent times and the outlook is positive with several companies considering India as their primary listing venue. Corporate earnings have been robust except for sectors impacted by supply side disruption or due to COVID-19. We expect the market activity to remain buoyant.
From the perspective of Indian resident shareholders in particular, the Indian tax and regulatory environment seems to be more conducive to, and provides far greater clarity and efficiency in case of, an India listing relative to an overseas listing of an Indian entity.
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