EY IPO Trends Report: Indian Stock Exchanges Continue to Lead Global IPO Activity in YTD23

• Indian stock exchanges (BSE and NSE) lead the world in IPO count during YTD23.
• Main market IPOs show a 50% increase in Q2 2023 compared to Q1 2023.
• Robust IPO pipeline with 13 companies filing DRHPs in Q2 2023.

Mumbai, 7 August 2023: EY, a leading global professional services organization, has released its IPO Trends Report, revealing significant achievements for the Indian stock exchanges in the global IPO landscape. According to the report, Indian stock exchanges (BSE and NSE, including SMEs) have ranked 1st in the world in terms of the number of IPOs and 8th in terms of issue proceeds during YTD23, with no cross-border deals recorded.

The main markets, comprising BSE and NSE, saw 6 IPOs in Q2 2023, including a fund raise by an infrastructure investment trust, compared to 14 IPOs in Q2 2022 and 4 IPOs in Q1 2023. This represents a decrease of 57% compared to Q2 2022 and an increase of 50% compared to Q1 2023.

In the SME markets, there were 32 IPOs in Q2 2023, showcasing robust growth compared to 18 and 38 IPOs in Q2 2022 and Q1 2023, respectively. This represents an increase of 78% compared to Q2 2022 and a decrease of 16% compared to Q1 2023.

The report indicates a positive outlook for IPO activity in India, with around 13 companies filing their Draft Red Herring Prospectus (DRHPs) in Q2 of 2023, contributing to the current IPO pipeline. Most active sectors in recent IPOs include Hospitality & Construction, Automotive & Transportation, Diversified Industrial Products, and Real Estate.

Speaking on the rise in IPO activity, Adarsh Ranka, Partner, Financial Accounting Advisory Services Leader, network firm of EY Global, said, "India's current IPO market trend showcases its immense potential and has witnessed a remarkable surge in recent years. India must continue to focus on enhancing regulatory frameworks, improving corporate governance practices, and fostering investor education. In the forthcoming months, there is anticipated to be significant momentum in the Indian IPO market, encompassing both the main and SME market segments."

SEBI, the regulatory authority, has introduced various amendments to enhance the capital markets' transparency and practices. These amendments include changes in pricing of the issue, disclosure of Key Performance Indicators (KPIs), introduction of pre-filing of draft offer documents (confidential filing), the establishment of the Social Stock Exchange, changes in monitoring agency functions and the definition of SMP to make it more inclusive.

Foreign Institutional Investors (FIIs) are showing sustained inflows in India due to the country's stable macroeconomic outlook, political stability, and impressive financial results, resulting in an 8% market rally since April 2023. India's consistent GDP growth of over 7% reinforces positive prospects for the market.

Hospitality & Construction sector took the lead in the Main markets during Q2 2023 with 2 IPOs. Additionally, based on Year-to-Date (YTD) figures for 2023, Automotive & Transportation, Diversified Industrial Products, and Real Estate each saw 2 IPOs in the Main markets.

Cube Highways Trust, an emerging asset class related to infrastructure investment trust, raised USD 637.5 million in proceeds, making it the largest IPO in Q2 2023 in terms of the issue size.

Veenit Surana, Partner, EY India, noted, "The recent amendments introduced by SEBI showcase the commitment towards enhancing market transparency and governance. These changes lay a strong foundation for future IPO activity and empower companies to align with best practices, reinforcing the trust of investors in the Indian capital markets."

On 30th June 2023, the Benchmark Indian equity indices Nifty and Sensex achieved all-time highs and settled at record closing highs. Nifty 50 surpassed 19,200 but closed at 19,189.05, while Sensex ended trade at 64,718.56, higher by 800 points.

The remarkable volume of IPOs in India, covering a diverse range of sectors and industries, showcases the country's economic resilience and its attractiveness as an investment hub.

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Notes to Editors

The IPO Trends Report is based on data and insights compiled by EY. The report provides a comprehensive analysis of the IPO landscape in India and globally, offering valuable insights to investors and market participants.