Most Anticipated IPOs Of 2024 In India: A Guide To Next Year's Public Market Debuts

Despite a slow start in 2023, the Indian primary markets experienced overall success. More public issues made their way to Dalal Street compared to the previous year, although funds raised through initial public offers (IPOs) were lower than in 2022.

In total, 57 issues entered the capital market in 2023, surpassing the 40 issues from the previous year. However, the total funds raised were 17% lower. Notably, the share of fresh capital raised in IPOs this year reached an eight-year high.

These issues witnessed significant listing gains and benefited from robust retail participation. Looking ahead, the market is poised to remain positive, with upcoming issues worth ₹28,440 crore in line to enter the public markets.

Here’s a list of the most-anticipated IPOs of 2024, based on exchange data, reports and market speculation.

1. Ola Electric

Ola Electric, the EV arm of Ola, is set to be one of the most anticipated IPOs in 2024, aiming to raise between $700 million and $800 million, which would value the company at $7 billion-$8 billion. It will be India’s first IPO in the motor sector in around 20 years.

Despite challenges like safety issues and customer service concerns, Ola Electric’s revenue has surged, reflecting its rapid growth from a cab aggregator to a leading EV maker. The company’s focus on sustainable transportation solutions positions it well in a market increasingly leaning towards green energy.

2. FirstCry

FirstCry, a Pune-based omnichannel marketplace, is also set to be one of the most sought-after IPOs in 2024 as its parent company, BrainBees Solutions, recently filed a draft red herring prospectus (DRHP) with SEBI, aiming to raise ₹1,816 crore through a fresh issue of shares.

This move includes an offer-for-sale (OFS) of 5.4 crore equity shares, with major stakeholders like Japan's SoftBank and Premji Invest participating, and founder Supam Maheshwari selling a portion of his stake.

The funds raised from this initial public offering (IPO) will be strategically allocated, with plans to invest ₹648 crore in setting up new stores and warehouses in India, covering lease payments for existing stores, expanding into Saudi Arabia, and investing in subsidiaries and technology.

3. Aakash (Byju’s Subsidiary)

Aakash, acquired by edtech major Byju’s in 2021 for $950 million, is said to have plans to launch its IPO by mid-2024. Post-acquisition, Aakash has seen a three-fold increase in revenue, with projections to reach ₹4,000 crore in revenue and ₹900 crore in EBITDA by FY 2023-24. The test-prep market, where Aakash is a key player, is expected to grow significantly, making its IPO a promising prospect for investors.

However, the IPO will be watched closely by investors, given its parent company’s recent troubles with lenders, layoffs and auditors.

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4. PhonePe

PhonePe, a leader in India’s digital payments space, is eyeing an IPO in 2024-2025. Following a $200 million capital infusion from Walmart, valuing it at $12 billion, PhonePe is in the midst of a $2 billion fundraise. The company’s expansion into various segments of digital payments and its robust growth trajectory make its IPO highly anticipated.

5. Oyo Rooms

Oyo Rooms‘ IPO has been long awaited but also much delayed as the travel-booking platform looks to raise public money to repay most of its debt.

After initially filing for an IPO, the firm refiled its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India under a confidential pre-filing route, though it reportedly slashed the issue size of its public listing by almost half to $400-600 billion, all of which will likely be raised through a primary issuance.

6. PharmEasy

PharmEasy is reportedly considering a public issue if it continues its robust performance. The Tata-owned company recently raised over ₹3,950 crore in a rights issue. PharmEasy is EBITDA positive as of Q1FY24, and the trend continues.

The company is awaiting CCI approval for the rights issue, after which Ranjan Pai is likely to hold around 15% of PharmEasy. The funds from the rights issue will be used for debt reduction and organic growth.

7. PayU India

PayU India is also expected to be IPO-ready by the second half of 2024. Owned by Prosus, PayU India offers financial services like merchant payments and consumer credit. The company reported $211 million in revenue from its India operations in the first half of the current fiscal year.

PayU India’s growth in payments and credit sectors and its significant market position make its IPO significant in the fintech sector.

8. Swiggy

Swiggy, a major player in the food delivery industry, is likely to go public in 2024. The company, valued at $10.7 billion, dominates the food delivery market in India. Swiggy’s IPO is expected to be a significant milestone for the company, reflecting its growth and market position.

If it does take a plunge into public markets, It would be the second food aggregator to do so after rival Zomato.

9. MobiKwik

MobiKwik is reportedly working with DAM Capital Advisors and SBI Capital Markets for its IPO, aiming to raise about $84 million. The company deferred its IPO plans previously but is now set for a 2024 listing.

MobiKwik, one of India’s largest mobile wallets and buy now, pay later service providers, is part of a broader trend of small- and medium-sized companies going public in India.

What To Consider When Investing In IPOs In 2024

In 2024, navigating the Indian IPO landscape demands a strategic approach for potential investors. Thorough due diligence is crucial, beginning with a comprehensive analysis of the company’s financial health, growth prospects, and market position.

Here are the major points to consider when investing in IPOs.

  1. Thorough Due Diligence:
    • Conduct in-depth analysis of the company’s financial health, growth prospects, and market position.
    • Evaluate the IPO’s purpose and fund utilization to understand the company’s strategic vision.
  2. Industry and Competitive Analysis:
    • Understand industry dynamics and competitive landscape for insights into the IPO’s potential success.
    • Scrutinize the management team’s track record and industry expertise for confidence in leadership.
  3. Market Awareness:
    • Stay informed about broader economic conditions and market trends to guide investment decisions.
    • Assess the grey market premium (GMP) for insights into market sentiment and expectations.
  4. Subscription Metrics Evaluation:
    • Examine IPO subscription metrics, including oversubscription levels and category-wise allotment, to gauge demand.
    • Review the prospectus, financial statements, and risk factors outlined by the company for a comprehensive view.
  5. Investment Strategy:
    • Define investment horizon, risk tolerance, and financial goals before participating in an IPO.
    • Follow the principle of diversification by spreading investments across sectors to mitigate risk.
  6. Stay Informed:
    • Keep abreast of regulatory changes, market sentiment shifts, and global economic developments.
    • Stay vigilant for updates in the IPO landscape, ensuring informed decision-making.

Navigating the Indian IPO landscape in 2024 demands meticulous research, strategic planning and a keen understanding of market dynamics.

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