October to mark India's biggest-ever IPO month with $5B deals
What's the story
India's initial public offering (IPO) market is gearing up for a record-breaking October, with firms expected to raise over $5 billion. The surge is led by major deals such as Tata Capital Ltd.'s and LG Electronics Inc.'s local unit, which are instilling confidence in the capacity of India's $5 trillion stock market to absorb large issuances.
Market dynamics
Domestic mutual fund inflows driving current IPO rush
The current IPO rush is largely driven by strong inflows from domestic mutual funds. These inflows have offset foreign outflows, making India a bright spot for bankers amid an uncertain global economy. Dhiraj Relli, managing director at HDFC Securities Ltd., said "cash holdings by mutual funds, continuously buttressed by consistent domestic flows, have whetted investors' appetite and positioned the market to absorb such substantial fundraising."
Upcoming offerings
Major IPOs lined up for October
The IPO pipeline for October is packed with major launches. WeWork India Management Ltd. plans to launch its ₹30 billion ($338 million) IPO on October 3, followed by Tata Capital's ₹155 billion share sale on October 6. LG Electronics' Indian unit is also expected to raise around ₹115 billion with its public issue that opens on October 7.
Future prospects
Other companies gearing up for their public issues
Other companies are also gearing up for their IPOs. Pine Labs Ltd., a digital payments provider, plans to raise as much as ₹60 billion later this month. Canara HSBC Life Insurance Co. is preparing a ₹25 billion IPO, while ICICI Prudential Asset Management Co. awaits regulatory approval for its public issue, which could launch at October-end.
Investment trends
Foreign investments in Indian IPOs decline this year
Despite their continued participation in primary offerings, foreign funds have scaled back their investments in Indian IPOs and placements. Their investments have fallen to ₹430 billion this year from ₹1.2 trillion in 2024. However, Indian firms have already raised about $11.2 billion through IPOs between January and September, according to Bloomberg data. An additional $8-10 billion could be added in the last quarter of the year, Goldman Sachs Group Inc.'s Kailash Soni said.