September Set to Become the Busiest Month for IPOs in 14 Years According to RBI Bulletin

September has emerged as the most active month for initial public offerings (IPOs) in both the mainboard and SME segments over the past 14 years, according to the Reserve Bank of India's latest Bulletin. More than 28 companies have entered the market so far, highlighting a significant shift in financial markets.

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The primary equity market is witnessing a surge in interest for IPOs from small and medium enterprises (SMEs), with domestic mutual funds showing keen participation. The IPOs have seen massive oversubscriptions, reflecting strong investor demand. A study by SEBI noted that 54% of IPO shares allotted to investors were sold within a week of listing.

IPO Activity and Investor Interest

Resource mobilisation through IPOs has been robust in 2024, with India leading globally by volume, accounting for 27% of IPOs in the first half of the year. This surge is primarily driven by public offerings from SMEs. In terms of proceeds, India contributed 9% of the total amount raised through IPOs worldwide.

Investor enthusiasm is evident, as demonstrated by a housing finance company's IPO in September's second week, which attracted bids exceeding Rs 3 lakh crore. This highlights the strong appetite for new listings among investors.

Capital Raising and Market Trends

An increasing number of listed companies are opting for qualified institutional placements to raise capital, with an estimated Rs 60,000 crore raised in the first eight months of 2024. Meanwhile, benchmark indices in the secondary market have risen amid intermittent corrections influenced by global cues, maintaining a bullish outlook.

The article, authored by a team led by RBI Deputy Governor Michael Debabrata Patra, also noted that global funds have been investing heavily in India's debt market for five consecutive months since May 2024. However, corporate debt issuances have remained low during this financial year despite easing yields, as issuers await a rate cut from the US.