35 mainboard IPOs in the first half of 2025 raised around 32,Rs000 CR - with an average subscription rate of 61 times
Mahavir Lunawat, Managing Director, Pantomath Capital Advisors Private
FinTech BizNews Service
Mumbai, July 16, 2024: Home-grown financial conglomerate, Pantomath Group has released its quarterly report “Market Kaleidoscope: Quarterly Market Insights” capturing current market trends, sectoral performance, and economic forecasts. This report provides key highlights, an overview of the Indian and global capital markets, and insights into the Indian IPO market.
Indian Outlook
The Indian Market remained positive for the first quarter of FY2025 followed by a strong earning season of Q4FY24, economic data and positive global clues. It remained volatile in early June following the final results of the 2024 Lok Sabha elections. Despite a drop in seats as compared to 2014 and 2019, the BJP secured 272 seats with allied support, leading to a total of 292 for the NDA. This outcome is viewed positively for long-term economic growth, fueling ongoing optimism for policies and reforms and supporting a medium to long-term positive outlook for Indian equities.
In June, the market saw a strong rally following the general election results. Under Narendra Modi’s leadership, the BJP-led NDA government is preparing for a third term, focusing on a 100-day action plan and the Viksit Bharat 2047 goals. Priorities include infrastructure, electric mobility, startup support, power distribution, a hydropower policy, digital privacy and Ayushman Bharat health initiatives.
Corporate India's performance in the March quarter of FY 2024 was on expected lines with year-on-year double-digit growth in aggregate net profit and single digit increase in revenue. The non-landing companies reported moderate expansion in operating margins helped by favorable commodities prices and better cost control. Corporate growth in the current fiscal year (FY2025) is expected to be healthy given peaking interest rates and expected continuity of government policies. India's achievement towards market capitalization sees a significant milestone as the total market capitalization of all stocks listed on the Bombay Stock Exchange (BSE) briefly surpasses $5 trillion for the first time, making India the fifth country after US, China, Japan & Hong Kong to achieve this milestone.
Sectoral Highlights
Sugar Sector
The sugar sector remains in focus due to the government's emphasis on increasing ethanol production, aiming for a 20% blending target by 2026. This policy, highlighted in the BJP's manifesto, benefits ethanol-heavy sugar companies. The government's plan to promote multi-feed distilleries for ethanol production aims to diversify feedstock beyond sugarcane, potentially reducing the sugar sector's reliance on traditional crops while supporting India's biofuel goals.
Indian Real Estate & Banking and Financial Sector
The Indian real estate market is set for robust growth, driven by government policies and urbanisation, requiring Rs14 lakh crore ($170 billion) in debt financing from 2024 to 2026. Mumbai, NCR and Bengaluru are expected to benefit the most, with significant increases in construction finance and lease rental discounting (LRD), which are anticipated to increase by 40% over the next three years. This will be positive for the Banking & financial sectors as well. As expected, Telecom operators made a Tariff hike postelection Results including Reliance Jio, Bharti Airtel and Vodafone Idea, which have raised tariffs to monetise 5G services, potentially improving sector financials. Experts believe tariff hikes are a positive step and the sector could be ripe for Re-rating.
Cement Sector
In the Cement Sector, major big players are expanding through inorganic acquisitions, expecting 6–7% compounded growth in the coming years, with top five players set to dominate over half the market by March 2025 as commented by experts and other Research agencies.
FMCG Sector
FMCG Companies have started guiding for recovery in business from rural regions. For the first time in several quarters, they are providing positive guidance for at least the next two quarters, based on factors like a normal monsoon, robust rabi crop, bumper wheat crop and government measures, such as an increase in MSP and higher spending on MNREGA. This is expected to maintain robust rural demand throughout the year.
Automobile
India may roll out the FAME 3 Scheme to encourage the sale of electric vehicles in the upcoming budget. Electric two, three and four-wheelers are expected to be supported under the Faster Adoption & Manufacturing of Electric Vehicles (FAME) scheme, which could receive a budgetary allocation of about Rs10,000 crore.
We continue to be bullish on key sectors like Auto & Auto Ancillary, Cement, Defence, Railways, Consumer Durables, Energy, Logistics, FMCG, Capital Goods & Engineering, Infrastructure, Construction, Banking, and Financials, which are expected to outperform in the rally ahead. Some laggard sectors also offer value buying opportunities at lower levels, including Information Technology, Specialty Chemicals and Metals. The structural bull market for Indian equity remains intact, supported by strong domestic fundamentals, government policies and reforms. We expect a positive view on the market for medium to long-term perspective
Ms Deena Mehta, Managing Director, Asit C Mehta Investment Interrmediates Limited (ACMIIL), said, “Corporate earnings growth momentum, Strong GST collection, Capex cycle revival, Strong credit growth, strong domestic demand environments, Positive global market trend, are the positive factors while unexpected surge in crude oil prices, Rise in trade deficit & Geo-political concern are potential near term Uncertain Risks for the overall GDP growth of the economy”
Global Outlook
The Global Market particularly the US market, remained positive except Dow Jones for the quarter with resilience in the economy. Fed officials are constantly monitoring economic data for their monetary policy decisions. They want to have comfort for Inflation to move towards 2% target range before initiating an interest rate cut. Federal Reserve kept interest rates unchanged at 5.25%–5.50%, citing inflation concerns and revised its projections to one rate cut in CY2024 as compared to previous forecasts of three cuts in CY2024.
The US GDP increased at an annual rate of 1.4% in the first quarter of 2024 according to the "third" estimate, impacted by lower consumer spending and negative inventory adjustments. It showed sharp contraction in the US economy as compared to the last quarter of CY2023 in which economy grew around 3.4%. Economic data highlighted both, strengths and challenges. Manufacturing PMI data indicates a slowdown in manufacturing activity and a reduction in new orders while non-farm payroll data indicates strong job addition and steady wage growth. However, Inflation pressure was evident from both, CPI and PCE data.
Brent crude traded around $85 per barrel in a broad range amid fears of economic slowdown & Geopolitical tension. The monthly reports of EIA and OPEC+ continue to maintain their positive demand outlook for crude in this calendar year. OPEC+ remained optimistic, forecasting increases of 2.25 million barrels per day in 2024 and 1.85 million barrels per day in 2025.
Mr. Devang Shah, Head Retail Research, Asit C Mehta Investment Interrmediates Limited (ACMIIL), said, “Public capex push by the government which ultimately now achieving its aim of the beginning of private capex revival of Indian companies. The Indian companies' balance sheet also shows less or moderate leverage. Banks are also at comfortable levels with constantly falling NPA levels with a pick up in credit growth. The proactive policies by RBI is beneficiary for banks for any kind of unexpected domestic & global financial risks. The Companies are also in a sound position to boost investments. These all factors are also indicating medium to long term GDP growth of the country.”
Indian IPO Market
The Indian IPO market has witnessed a remarkable growth in recent times. This thriving activity is characterized by a substantial increase in the number of companies seeking to list their shares on the stock exchange, alongside a corresponding rise in capital raised. This trend signifies a period of robustness and dynamism within the Indian financial landscape.
There were 35 mainboard IPOs in the first half of 2025 that raised around ₹ 32,000 crore, subscribed average of 61 times. These Companies were from diverse sectors like coworking space, furniture retailing and online ticket booking. Most IPOs witnessed strong retail buying, showing domestic investors remain bullish on India's solid growth story amid the prospects of policy continuity, pro-growth government measures, benign inflation and the start of the interest rate cut cycle.
Key Trends
Mr Mahavir Lunawat, Managing Director, Pantomath Capital Advisors Private Limited, said, “Favourable market conditions, high liquidity, a conducive growth environment with stable interest rates, and benign inflation have facilitated a boom in the IPO market. The IPO market will experience a stronger pull post-budget. India is set to become the new equity funding frontier for global corporations.”
He further added. “We are on the brink of sustained, long-term momentum in the IPO market, with this year potentially becoming the best for IPOs. India's solid macroeconomic environment and promising growth prospects create an ideal backdrop for this vibrant IPO market. Additionally, there is robust participation from both domestic institutional investors and retail investors.”
Way Forward
The recently concluded elections are expected to boost the second half of CY25 market activity. Improved market sentiment and a potentially stable economic environment encourage companies to launch their public offerings. Additionally, the success of several IPO listings in the first half of CY25 could further drive momentum.
Overall, a stronger CY25 for the IPO market is anticipated, with increased activity, potentially larger deals, and new listings across diverse sectors. As always, a thorough analysis of individual company fundamentals and future prospects remains crucial before making any investment decisions. India's primary market anticipates a bustling period ahead, with 55 companies planning to raise over ₹ 68,000 crore via IPOs
