Over 130 IPOs in six months! India in IPO frenzywww.deekpay.com

## India's IPO boom: risks behind the mania The Indian stock market continues to soar, and the IPO market is also on fire. According to FactSet data, 130 companies have gone public in India so far in 2024, raising as much as 313 billion Indian rupees (about $3.74 billion). The number of IPOs this year is expected to surpass 2023 and hit a record high. In 2023, 238 companies went public in India, a nine-year high for the country, raising a total of INR 614 billion (about $7.35 billion). India even ranked first in the world in terms of the number of IPOs last year. Multiple factors fuelling India's IPO boom According to Neil Bahal, founder of venture capital firm Negen Capital, the policy support of the Securities and Exchange Board of India and the active participation of retail investors in the market have combined to drive the performance of the Indian stock market and incentivise companies to go public. Dhruba, chief executive officer of capital management firm WRISE Private Middle East, pointed out that venture capital and private equity see the Indian stock market as a great exit (profit) route. He expects Indian electric car maker Ola Electric, education company Aakash Educational Services and third-party payment platform PhonePe, among others, to list in India. A number of Indian tech companies are currently in the process of IPOs, including food and grocery delivery company Swiggy, online travel portal Ixigo, software services company Unicommerce and payments company MobiKwik. In addition, the attraction of Indian IPOs is spreading to overseas companies as well. This week, Hyundai Motor India's IPO is slated to raise $2.5 to $3 billion, which would make it one of the largest IPOs ever in India. Overvalued and risky However, behind the revelry there are also hidden risks. Some analyses point out that the current high valuation of the Indian stock market may face downside risks in the future. Kunal Vora, head of Indian equity research at French bank BNP Paribas, said the strong momentum in the Indian IPO market is likely to continue in the short term, but in the long term, the valuation issue is one of the main concerns of the current market. Data shows that not only have companies listed in India since the beginning of 2021 been oversubscribed by an average of 44 times, but these stocks have risen by an average of about 25% on their first day of listing. however, about two-thirds of the listed companies have subsequently lagged the broader market. For example, Paytm, one of the first tech startups to go public in 2021, has seen its shares now trade at around Rs 609 per share, a retreat of nearly 701 TP3T from its IPO price. After the general elections in India, the country's stock market has also become more cautious. Summing up: The Indian IPO market is currently on fire, but issues such as high valuations and underperforming returns are also cause for concern. Investors need to carefully assess the risks and avoid following the market blindly. Caution: This article is for reference only and does not constitute investment advice. Investment is risky, the market needs to be cautious.