- India records 12 IPOs in Q4 2019
- Indian stock exchanges (BSE and NSE, including SMEs) rank seventh globally in terms of number of IPOs
India recorded 12 IPOs (US$0.34b proceeds and US$2.5m median deal size) in the fourth quarter of 2019 with Indian stock exchanges (BSE and NSE, including SMEs) ranking seventh globally in terms of number of IPOs according to EY India IPO Trends Report: Q4 2019
Consumer products and retail sector was the most active with four IPOs, followed by banking and capital markets with three IPOs and diversified industrial products with two IPOs.
Sandip Khetan, Partner and National Leader, Financial Accounting Advisory Services (FAAS), EY India said, “We anticipate the IPO market to pick up this year with the government expected to announce measures in the upcoming budget to address the economic slowdown. Overall, markets are expected to remain volatile, and companies and investors who have adopted a ‘wait and watch’ policy need to be prepared to take the leap of opportunity in 2020.”
In the main markets (NSE and BSE), there were four IPOs in Q4 2019 versus two IPOs and six IPOs in Q4 2018 and Q3 2019, respectively. As compared to Q4 2018, there is an increase of 100% and as compared to Q3 2019, there is a decrease of 33%. However, with the cuts in corporate tax rates, corporate earnings are expected to increase. The government has already announced stimulus packages for automobile, real estate, telecom and financial services sectors, which may help companies achieve growth. In addition, there has been an increased inflow from foreign portfolio investors (FPIs).
In the SME markets, there were eight IPOs in Q4 2019 versus 32 IPOs and nine IPOs in Q4 2018 and Q3 2019 respectively, representing a significant drop of 75% and 11% as compared to Q4 2018 and Q3 2019, respectively. During Q4 2019, SBI Cards and Payment Services Pvt. Ltd. filed for an IPO with an issue size of approximately US$1.3b. Filing for such an issue size is a positive indication of investors’ appetite for new issues in the capital market. Other successful filings include - Indian Railway Catering and Tourism Corporation Limited (IRCTC) and CSB Bank Limited.
Global activity in Q4 2019 (353 IPOs and proceeds of US$84.5b) was 5% lower in deal volume and 53% higher by proceeds compared with Q4 2018. Two of the largest IPOs in 2019 came to the market in Q4, improving IPO activity for the quarter.
2020 global outlook: more robust IPO activity, particularly in the first half of the year: Looking ahead, several uncertainties will subside in 2020. Trade tensions between the US, China and the EU; the outcome of Brexit; and uncertainty with respect to the stability some European economies will fade in early 2020 and will positively impact overall IPO sentiment.
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About the data
The data presented in the Global IPO trends: Q4 2019 report and press release is from Dealogic and EY teams. Q4 2019 (i.e., October-December) and 2019 (January-December) is based on priced IPOs as of 4 December 2019 and expected IPOs in December. Data is up to 5 December 2019, 9 a.m. UK time. All data contained in this document is sourced to Dealogic, CB Insights, Crunchbase and EY unless otherwise noted.