KPMG estimates Indian IPOs will raise US$10 billion in the next six months

Indian companies have raised US$10.8 billion from first-time share sales this year. At this pace, 2021 is geared to well surpass the US$11.8 billion record of 2017.

Indian IPOs to raise a staggering Rs 75,000 crore

Investors across the globe see massive potential in India’s technology sector and continue to put in their monies to back new-age companies.

What is the forecast?

KPMG is bullish on Indian digital companies and expects them to raise a staggering Rs 75,000 crore (US$10 billion) via Initial Public Offerings (IPOs) in the next six months. 

“India is unveiling an absolutely new area of growth with these digital companies for hungry global asset managers. A lot of money printed during the Donald Trump administration is invariably finding its way to the stock markets globally, and India is one of the beneficiaries,” Srinivas Balasubramanian, Senior Partner and Head of Corporate Finance at KPMG India, told Bloomberg Television in an interview, as per a media report.

According to a study by Bloomberg, Indian companies have raised US$10.8 billion from first-time share sales this year. At this pace, 2021 is geared to well surpass the US$11.8 billion record of 2017.

Related: IPOs In 2021: How To Invest In IPO Via Kotak Securities, HDFC Securities, Sharekhan, And ICICI Direct

What is driving this growth?

The Coronavirus pandemic presented unprecedented challenges to businesses. Now, after nearly two years, they are finally returning to life. This is being aided by massive efforts by health workers, mass vaccination drives undertaken in every corner of the country, accommodative and supportive central bank policy, and expected economic growth of 9.5% this year.

Another aspect fuelling India’s stock market rally, Balasubramanian said, is the market sentiment being accentuated by the Chinese government’s regulatory crackdown on its technology companies. This is funnelling global investors’ money to India instead. In the past, when asset managers had money to invest, “90% of that went to China due to their growth and consumption story, but now 80% is coming to India,” he added, stated the media report.

He further said that old economy companies will be seen driving mergers and acquisitions as they sell their assets to pare debt. Additionally, digital/technology companies and financial services firms will seek to consolidate by using stock as currency.

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