IPO Deals May Touch $50 Billion In 2024: Kotak Investment Banking

The IPO and deal-making activities are likely to be brisk this year and may even surpass the record set in 2021 with around $50 billion funds being raised across equity issuances and deals, according to Kotak Investment Banking.

Addressing the media, Managing Director and Chief Executive Officer S Ramesh said, led by new-age tech companies, the primary market is likely to see brisk activities this year, coupled with overall funding market, will see an inflow of about $50 billion.

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

V Jayasankar, a managing director with the company, said he expects more large Initial Public Offerings (IPOs) to hit the market this year.

Election-related volatility is unlikely to impact primary market activities for long because normally poll-related issues should end within two-three months.

There were a total of 59 IPOs in 2023, and close to Rs 53,000 crore was raised from the main-board.

The record issuances in terms of numbers -- 59 main board issues and 182 SME issues -- made Dalal Street the fourth largest in the world in terms of money collected (around Rs 53,000 crore) after the U.S., China, and Japan.

When it comes to deals, they said buyouts totalled $55 billion between 2019 and 2023, surpassing the total value of the preceding 15 years.

As per bankers, this is primarily because promoter families are willing to cede control for value creation.

Another reason for their optimistic outlook flows from the fact that more and more corporates are strategically diversifying their fundraising efforts, incorporating a blend of debt and equity, to establish investment opportunities, they said.

The domestic market is likely to see 20 unicorns over the next two years, lapping up around $10 billion, they added.