Indian IPO market experienced significant slowdown

New Delhi: After record-high levels of IPO activity in 2021, volatile market conditions have resulted in a significant slowdown during the first quarter of 2022.
In Q1 2022, the Indian market introduced 16 IPOs vs 23 IPOs in Q1 2021, according to the EY Global IPO Trends Q1 2022.
During Q1 2022, proceeds raised through the main markets equated to $ 995m via three main market IPOs compared to US$ 2.57 bn during Q1 2021, which is a decline of 60 per cent in proceeds raised and a decline of 82 per cent in the number of deals. SME segment raised US$ 17.46m via 13 IPOs during Q1 2022.
The sudden reversal can be attributed to a range of issues, both emerging and residual. These include the rise in geopolitical tensions; stock market volatility; price correction in over-valued stocks from recent IPOs; growing concerns about a rise in the commodity and energy prices; the impact of inflation and potential interest rate hikes; as well as the Covid-19 pandemic risk continuing to hold back full economic recovery.
The three largest IPOs in terms of proceeds were Adani Wilmar, Vedant Fashions and AGS Transact Technologies, with consumer products & retail being the most active sector followed by the diversified industrial products.
Also Read India-based fintechs continue to dominate funding in Asia-Pacific On the findings of the report, Sandip Khetan, Partner and Financial Accounting Advisory Services Leader, EY India, said, “The IPO momentum of a blockbuster 2021 has not carried over to 2022 so far. Issuance and proceeds are well off last year’s pace, as geopolitical uncertainty along with other macro factors continues to affect investor sentiment. That said, we are witnessing the largest IPO (of LIC) in Indian capital markets and the successful closure of other recent IPOs. The backlog of IPOs could lead to a strong upswing in volumes if volatility does moderate and earnings are robust.”