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India’s resilient stock market sets the stage for record-breaking IPOs

As of June 11, 18 companies have received approval from the Securities and Exchange Board of India (SEBI) to go public, and another 27 companies are awaiting the green light, according to Prime Database, an Indian database dedicated to the primary capital market.

That pipeline is forecast to raise Rs 75,000 to 80,000 crore or $10.2 billion to $10.9 billion, says Prithvi Haldea, founder and chairman of Prime Database. With more companies expected to file for IPO approval, the total amount raised in the fiscal year ending in March 2022 is likely to exceed the previous high of $11.1 billion set in 2018, he says.

“The rush of IPOs will continue as long as the secondary market remains buoyant,” Haldea says.

India’s benchmark BSE index on Monday closed 0.4% shy of its all-time high of 52,773 points, set on June 15. During India’s second COVID wave, which infected millions, killed tens of thousands, and locked down large swaths of the country, the market took an initial hit but rebounded quickly, hovering around the psychologically important 50,000-point threshold, even as coronavirus cases topped 400,000 per day.

Investors looked beyond the second wave’s immediate hit to demand, focusing instead on India’s alluring long-term fundamentals: The economy is expected to grow this year at its fastest pace since the global financial crisis; the government plans to boost medium-term growth with federal spending; and India boasts the world’s second-largest population, which is also one of its youngest. Indian consumers are going digital faster than expected thanks to the pandemic. For instance, the number of people using online grocery services more than doubled to 23 million in 2020, according to management consultancy RedSeer.

What’s more, liquidity is readily available, and interest rates are low.

Those factors have coalesced to juice investor confidence and convince startups that now is the time to list.

Read More at https://fortune.com/2021/06/22/india-ipo-pipeline-stock-market-rally/

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