Fundraising for IPO expected to cross Rs 4.15 lakh crore this year: Kotak Investment Banking

IPO and deal-making activity is expected to be brisk this year, possibly even breaking 2021's record of around $50 billion (approx ₹According to Kotak Investment Banking, funds worth Rs 4.15 lakh crore will be raised through equity issues and deals.

Addressing the media, Managing Director and Chief Executive Officer S. Ramesh said that the primary market, led by new-age tech companies, is expected to witness buoyant activity this year and the overall funding market is expected to witness an inflow of around Rs 50 crore US dollars will be recorded.

Domestic funds pumped $25.8 billion into the market in 2023 and this amount could reach $50 billion, he said, adding that Nifty's one-year forward premium is at a record high of 20.1x is the highest among emerging markets and there is scope to rise to 17.7x with the 10-year average premium.

V Jayasankar, managing director of the company, said he expects more large initial public offerings (IPOs) to come to market this year.

Election-related volatility is unlikely to impact primary market activity in the long term as poll-related issues should typically end within two to three months.

There were a total of 59 IPOs in 2023, almost ₹53,000 crore was raised from the main board.

The record number of issues – 59 main board issues and 182 SME issues – made Dalal Street the fourth largest in the world in terms of funds raised (approx ₹53,000 crore) to USA, China and Japan.

As for deals, they said buyouts totaled $55 billion between 2019 and 2023, exceeding the total value of the previous 15 years.

According to bankers, this is primarily because the founding families are willing to give up control over value creation.

Another reason for their optimistic outlook comes from the fact that more companies are strategically diversifying their fundraising efforts and integrating a mix of debt and equity to create investment opportunities, they said.

They added that the domestic market is expected to see 20 unicorns with sales of around $10 billion in the next two years.

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