In the previous year, the primary market experienced a subdued performance, marked by a 36 per cent decline compared to the IPO boom observed in 2021.
However, the year 2023 marked a resurgence for the primary market, witnessing the debut of 57 mainline IPOs, including prominent firms such as Mankind Pharma and Tata Technologies. The enthusiasm reached such heights that even netizens found it challenging to contain their excitement. Social media platforms were filled with memes humorously depicting the prolonged wait for IPO allotments.
In 2023, global IPO volumes, as per a report by EY Global, declined by 8 per cent, and proceeds were down by 33 per cent compared to 2022. However, the story was different for India, with nearly 57 mainline IPOs raising over Rs 49,437 crore. Here are the top five mainline IPOs of 2023, ranked by listing gains.
Generating a social media buzz well before its secondary market debut, Tata Technologies, a subsidiary of Tata Motors (TML), stirred widespread conversations about the prospect of securing allocated shares. This anticipation translated into an impressive market debut, with Tata Tech listing at a staggering 140 per cent premium over the issue price of Rs 500. Closing the listing day at a premium exceeding 160 per cent, the company not only demonstrated robust market performance but also showcased strong annual growth in net profits—from Rs 436.99 crore in FY22 to Rs 624.04 crore in FY23. Through its listing, Tata Tech raised approximately Rs 791 crore, reinforcing its position in the global engineering research and development (ER&D) services industry.
"The company's investments in R&D and its expertise in cutting-edge technologies such as digital engineering solutions attracted investors looking for companies with future potential," said Amit Goel, Co-Founder and Chief Global Strategist at Pace 360.
Ideaforge Technology Ltd.
IdeaForge stands as the premier market leader in India's unmanned aircraft systems (UAS) market. Amidst heightened attention to drone technology this year, the company made a remarkable debut, commanding a premium of approximately 93 per cent. Despite a downturn in annual profits, investor confidence remains steadfast, driven by optimistic projections for the company's future. Globally ranking 7th among dual-use (civil and defense) drone manufacturers, IdeaForge boasts the largest operational deployment of indigenous UAVs across India. The company had raised an amount of Rs 567 crore through its listing.
"The company demonstrated consistent revenue growth and a path to profitability, affirming a robust business model and promising prospects," said Goel.
Utkarsh Small Finance Bank Ltd.
This year marked a robust period for small finance banks, majorly attributed to heightened profitability and increased domestic demand. Utkarsh Small Finance Bank debuted on the stock market with a premium exceeding 90 per cent.
The bank observed a significant surge in net profit, rising from Rs 61.46 crore in FY22 to Rs 404.50 crore in FY23. It raised an amount of Rs 500 crore through its listing, and since its debut, the company's shares have yielded a return of over 10 per cent on the National Stock Exchange. The bank demonstrated consistent profitability, with a healthy return on net worth (20.22 per cent) and strong earnings per share (Rs 4.52) in FY 2022-23. As per analysts this financial performance attracted investors looking for long-term value creation.
In the face of global economic challenges, IPOs in 2023 have demonstrated resilience, featuring a combination of strong market entries and careful investor sentiment. "This performance is largely driven by factors such as macroeconomic conditions, investor sentiment, and company-specific fundamentals. Market volatility, influenced by geopolitical tensions, has played a significant role in shaping investor attitudes," said Manick Wadhwa, Director of Strategy at SKI Capital Service Limited.
Indian Renewable Energy Development Agency Limited, a public government company, raised Rs 2,150.21 crore through its IPO, comprising a fresh issue of 40.32 crore shares (Rs 1,290.13 crores) and an offer for sale of 26.88 crore shares (Rs 860.08 crores). The PSU debuted with a staggering premium of 87 per cent.
As a leading government agency in India's renewable sector, IREDA finances a variety of renewable energy projects, including solar, wind, hydro, biomass, and waste-to-energy. The company experienced a surge in profits, increasing from Rs 634 crore in FY22 to Rs 865 crore in FY23
Netweb Technologies India Ltd.
Netweb Technologies India Ltd. (NTIL) is a leading Indian OEM specializing in High-Performance Computing Solutions (HCS).
The company had raised Rs 631 crore through its initial public offering, consisting of Rs 206.00 crore from a fresh issue and Rs 425.00 crore from an offer for sale.
With a substantial market presence, NTIL serves various industries, including IT, entertainment, BFSI, national data centers, and government entities. The company doubled its profits, increasing from Rs 22 crore in FY22 to Rs 46 crore in FY23. It debuted on the stock market with a premium of 82.1 per cent.
Analysts believe that NTIL is positioned strategically for growth in India's high-performance computing market amid digital transformation and increased cloud adoption. Moreover, the company's partnership with NVIDIA positions the company as a key player in advancing AI.
"As we look towards 2024, the outlook for IPOs, especially in the SME space, is cautiously optimistic but may witness some correction. However, companies with robust financial foundations and clear governance are expected to continue attracting capital," said Wadhwa.