'$200 mn an hour, oversubscription in hours'! India’s IPO market booming

Core Insights - India's IPO market is experiencing a significant boom, with LG's IPO being the third-largest this year, positioning India as one of the world's most active IPO destinations, with total proceeds nearing last year's record of $21 billion [4][11] - Domestic investors are increasingly driving the IPO frenzy, with their participation reaching approximately 75% in 2025, indicating a fundamental shift towards a self-sufficient IPO ecosystem [5][6][11] - The current IPO landscape is characterized by a growing pool of capital from domestic mutual funds, insurance companies, and retail investors, reducing reliance on foreign inflows [5][12] Subscription and Performance - Lenskart Solutions Ltd's IPO achieved a subscription rate of 1.13 times, attracting bids for over 11 million shares against 9.9 million available shares [11] - LG's IPO saw subscriptions of $200 million per hour, with domestic participants accounting for 60% of total bids during the three-day subscription period [11] - Indian IPOs have delivered a weighted average return of 18% this year, outperforming the NSE Nifty 50 Index's increase of 9.7% [12] Market Dynamics - The IPO market is undergoing a transformation, with domestic institutional investors increasing their ownership in over 2,000 NSE-listed companies to 19.2%, while foreign portfolio investors' holdings have declined to 17.3% [12] - The median one-month post-listing return for IPOs has decreased to 2.9% in the current year, down from 22% in the previous year, indicating diminishing quick returns [9][12] - Approximately half of the listings across primary and secondary boards have fallen below their issue price, particularly affecting smaller IPOs [12] Future Outlook - Anticipated significant IPO offerings in the next 24 months include Reliance Jio Infocomm Ltd., National Stock Exchange of India Ltd., and Flipkart India Pvt., among others [12] - The current IPO surge is compared to China's past growth, driven by an expanding middle class and increased internet accessibility, with expectations for record-breaking proceeds in 2026 [10][13] - Recent regulatory changes have streamlined the public listing process for large private companies, supporting the ongoing market expansion [10][13]