IPO activity headed for record year; India could exceed $5-bn 2017 target

The initial public offering (IPO) activity in the country is headed for a record year in 2017. The past quarter saw 26 IPOs raising $1.8 billion. The re-emergence of larger listings in the pipeline can also help India far exceed the initially expected target of $5 billion in proceeds for 2017.

There has been particularly strong activity in the insurance sector due to regulatory changes and a number of major insurance companies are getting ready for their IPOs.

An increased number of issuers aim to take advantage of a rally in the stock market and increased investor demand.

The government also plans to list four of its public sector defence units. Globally, the third quarter of 2017 saw 10 $1-billion deals pushing stock exchanges in India, and some other countries, including Brazil, Singapore, and Switzerland, into the list of the world's top 10 by capital raised, behind Shanghai and Hong Kong.

"The successful completion and listing of SBI Life Insurance's IPO, one of the largest in recent times, demonstrates the strengths of the Indian IPO environment and with the continued buoyancy in the equity markets, the year 2017 is likely to be a record year in relation to fundraising through equity markets. Companies likely to raise capital through equity markets should start planning for the same so as to be ready to tap the market in the next 12 to 18 months," said Sandip Khetan, partner and national leader, FAAS, EY India. 

EY India Partner Vish Dhingra said that for companies to do a successful IPO and create shareholder value, they need to go beyond the short-term approach and focus on creating sustainable long-term value by setting up robust organisational governance and reporting structures and communicate the same to different stakeholders in a meaningful manner.