Auto, Telecom & Ecommerce Drives Growth In CY24 IPO Market: Report

In CY24, the Indian markets showcased resilience and strength despite weak global macroeconomic conditions, elevated interest rates and ongoing geopolitical uncertainties that fuelled volatility worldwide. Amid these challenges, the Indian IPO market thrived, achieving record milestones and underscoring the nation’s economic vitality.

The past year witnessed IPO activity across a wide array of sectors, marking a shift from earlier trends dominated by a few industries. This diversification, as observed by Motilal Oswal, reflects the increasing maturity of India’s capital markets and provides investors with expanded opportunities to participate in the country’s growth story.

CY24 marked a record-breaking year for IPO fundraising in India, with Rs 1.8 trillion raised across 317 offerings - the highest ever, surpassing the Rs 1.3 trillion milestone set in CY21 and exceeding the Rs 576 billion raised in CY23. According to a report by Motilal Oswal, the contribution of IPOs to India’s market capitalisation rose to 2.9 per cent from 1.4 per cent in CY23, though it remains below the peaks of 3.7 per cent in CY17 and 3.4 per cent in CY21.

The year also saw some landmark issuances. Hyundai Motor led with the country’s largest-ever IPO, raising Rs 278.6 billion in October and surpassing LIC’s Rs 205.6 billion issuance in May 2022. Vodafone Idea made waves with the largest follow-on public offering (FPO) to date, raising Rs 180 billion in April.

The year marked a shift in sectoral representation, mirroring the evolving dynamics of India’s economy. Automobiles, telecom, retail, capital goods, and ecommerce collectively accounted for 59 per cent of the total issue size across 83 companies, highlighting the growing influence of consumer-driven growth, digital transformation and infrastructure development.

Automobiles stood out as a top performer, with its share of IPO proceeds surging from 4.1 per cent in CY23 to 20.2 per cent in CY24. Telecom also witnessed growth, increasing its contribution from 0.1 per cent in CY23 to 12.8 per cent, while ecommerce rose from 1.6 per cent to 8.2 per cent. In contrast, sectors like healthcare and technology saw sharp declines, with healthcare’s share dropping from 16.3 per cent to 5.9 per cent and technology plummeting from 9 per cent to 0.7 per cent.

These shifts reflect broader economic trends. The rising prominence of ecommerce and telecom underscores India’s accelerating digital economy, while capital goods and real estate continue to exhibit cyclical patterns linked to infrastructure development and market conditions.

In CY24, 43 per cent of the total funds raised through IPOs were concentrated among five major companies namely Hyundai Motor (Rs 278.6 billion), Vodafone Idea (Rs 180 billion), Swiggy (Rs 113.3 billion), NTPC Green (Rs 100 billion) and Vishal Mega Mart (Rs 80 billion). Reflecting growing market diversity, companies from 23 distinct sectors participated in the IPO market this year.

Small and Medium Enterprise (SME) IPOs also gained momentum, with 236 out of 317 IPOs originating from SMEs. Capital raised through SME IPOs rose to Rs 92 billion, up from Rs 49 billion in CY23. However, their share of the total IPO market fell to 5.3 per cent from 8.6 per cent in the previous year, reflecting the dominant growth of larger players.

The year highlighted challenges in market efficiency while showcasing progress. For instance, the narrow sectoral focus of previous years when BFSI, healthcare and real estate accounted for 90 per cent of issuances in CY20, exposed risks associated with over-reliance on a few industries. By contrast, the broader sectoral representation in CY24 points to a healthier, more balanced market.

CY24’s record-breaking IPO performance underscored the increasing sophistication and resilience of India’s capital markets. The shifts in sectoral representation reflect a dynamic economy, emphasising the need for companies and investors to adapt to emerging trends.

As India’s markets continue to expand into Tier-3 cities and beyond, the success of CY24 sets a strong foundation for the future - a future defined by growth, innovation and opportunities across diverse sectors.