India witnessed 38 per cent increase in M&A activity growing from $79 billion the previous year to $109 billion in CY24, reflecting robust investor confidence. Also after a brief slowdown last year, Indian conglomerates are again driving significant activity across sectors, focusing on diversification and strategic expansion, with their deal contribution almost doubling in CY24 to $48 billion from $26 billion the previous year, said V Jayasankar, Managing Director, Kotak Investment Bank.
The bank also said that CY24 saw the highest ever fundraising in the history of Indian equity capital markets at $74 billion and the momentum is expected to continue with a $35 billion IPO pipeline this year. The companies are continuing to consider IPOs as a source of funding capex with 40 per cent of primary funds coming from IPOs. According to the investment bank, fundraising activity in India has been notably broad-based, spanning all sectors, unlike global capital markets such as the US, which are often dominated by a few key industries like technology, healthcare, or financial services.Â
It also highlighted how the domestic capital pool is providing stability to the volatility from FII flows. As per the bank’s report, domestic investors contributed a total of $62 billion, out of which 50 per cent came from the SIPs, compared to $0.4 billion from FIIs in CY24. Also demat accounts increased to 18 crore by October 2024, primarily from non-traditional states like Bihar, Uttar Pradesh, Madhya Pradesh etc. India’s equity capital market saw robust performance across all major sectors with market returns diversified across small mid-cap and large-cap companies. IPOs in CY24 gave strong returns of 32.8 per cent on an average.
Another trend the bank noticed was MNCs preferring India as a listing destination, listing their Indian subsidiaries or flipping their corporate office to India or consolidating their global business under one Indian entity to list in. MNCs are also increasingly monetising their holdings contributing almost 1/3rd of sell downs in CY24. Hyundai’s success prompted multiple MNC conglomerates to consider value unlocking through India IPOs. So, MNCs are increasingly looking at Indian public markets as a viable monetisation route.
Hyundai Motor India IPO worth $3.3 billion was India’s biggest IPO till date. Hyundai shares made a debut on the Indian stock exchanges in October last year and the stock was listed at Rs 1,931 on BSE, a discount of 1.5 per cent to the issue price of Rs 1,960 per share. Currently, Hyundai stocks are trading at Rs 1,787 on BSE.