India’s busiest month for IPOs in 14 years will be September 2024, SME IPOs drive the frenzy: RBI
September 2024 will be the busiest month for IPOs in 14 years, the Reserve Bank of India (RBI) wrote in its bulletin, adding that this includes both mainboard and small and medium enterprises (SME) IPOs.
Over 28 companies have entered the market so far and 54% of IPO shares were sold within a week of listing, according to the bulletin dated September 20, 2024.
Also Read: Qualcomm may take over struggling rival Intel in the biggest tech M&A deal ever: Report
The RBI attributed this phenomenon to a surge of interest in SME IPOs marked by massive oversubscriptions, with interest coming from even domestic mutual funds.
This is not just a domestic record. India had the highest number of IPOs globally at 27% during the first half of 2023-24, and this was led by SME IPOs.
India also accounted for 9% of the total proceeds from IPOs globally.
However, the RBI also stated that India’s IPO frenzy has raised concerns of promoters using the opportunity to sell their holdings at elevated or overvalued prices, especially when it comes to the SME segment.
What has been done to address these concerns?
The RBI says that regulatory changes like the ceiling on IPO funding by NBFCs and the shift from a proportionality-based allotment method to a lottery-based allotment method has helped to control massive oversubscription rates seen earlier in mainboard IPOs.
Also Read: Boeing ousts its defense and space chief amid cost rise and Starliner fiasco
How did the Indian stock market perform?
The Indian stock market rallied, with the benchmark BSE Sensex closing at 84,544.31, a gain of 1.63% or 1,359.51 points after the trading session for the week ended on Friday, September 20, 2024. The NSE Nifty closed at 25,790.95, a gain of 1.48% or 375.15 points.
Meanwhile, the BSE SME IPO index also closed in the green at 99,627.27, a gain of 1.49% or 1,463.33 points.
Also Read: Oyo to buy iconic hotel chains Motel 6 and Studio 6 for $525 million for US expansion
