India Inc raises record $30bn in 6 months, riding FPO wave

Indian companies raised a record $29.5 billion (nearly £25 bn) in the equity market through IPOs & FPOs during the first half of 2024, more than double the amount raised in the same period last year. The Jan-June total is the highest ever in terms of proceeds, with the number of issuances also rising 64%.
The surge has been driven by follow-on public offers (FPOs) this year - making up 85% of the total proceeds this year, LSEG’s India Investment Banking Review said.
In the first half of 2024, Indian IPOs raised $4.4 billion -a 98% increase compared to the year-ago period. The number of IPOs also saw a 71% jump year-on-year. India accounted for 27% of global IPOs by volume, up from 13% in the same period last year.
Follow-on offerings raised $25.1 billion, a 156% increase from a year ago. The number of follow-on offerings grew by 56% over the same period last year. An FPO refers to an additional issuance of a company’s shares after its IPO.
Despite the flood of new shares, demand has continued to outstrip supply as investors rushed in to buy more equity after the general election results were announced, pushing Nifty up by 10% in the first half of the year.
According to analysts, 2024 might well be a record year for equity issuances if Hyundai India proceeds with its proposed $2.5-3 billion IPO - which will be India’s biggest ever. Other large IPOs expected by the market include a £830 mn offer from Pine Labs, a £700 mn issue by Bajaj Housing Finance and a possible listing of HDB Finance.
The significant inflow of funds into capital markets is anticipated to make available more shares to meet demand. In the first half, promoters of 37 listed companies, including multinational corporations, offloaded their shares to both domestic and offshore investors. There have been suggestions that govt should also divest its holdings in public sector companies to capitalise on current valuations.