IPO pipeline to touch Rs.200,000 crore in calendar 2022

Year 2021 was a stellar year for IPOs. During the full year a total of 65 IPOs hit the primary markets raising close to Rs.135,000 crore during. This is already 40% more than the previous record of IPO collections in the year 2017.

However, it is expected that the year 2022 could set an all-time record collecting over Rs.200,000 crore if all goes well with the IPO story.

Year 2021 was largely a story of digital IPOs. Yes, there were large non-digital IPOs like Nuvoco Cements, auto ancillary maker Sona BLW and Star Health Insurance; which were in excess of Rs.5,000 crore each.

However, the big story was about the Big-4 digital IPOs that collected Rs.40,000 crore between them. The success of IPOs in 2021 was all about the surge in digital IPOs like Zomato IPO, Paytm IPO, Policybazaar IPO and Nykaa IPO.

Of course, the big IPO story of 2022 will be the LIC IPO. As of now it is unclear whether the IPO will happen in FY22 or in FY23, but it looks certain that the IPO will be completed in calendar year 2022. 

Based on how much the government eventually decides to sell, the IPO size could be anywhere between Rs.70,000 crore and Rs.100,000 crore. That alone would account for bulk of the IPO collections in the year 2022.

However, the story of 2022 will also be a continuation of the digital India story. A number of big marquee names are already lined up for IPOs. There are the big names like Delhivery, Snapdeal and PharmEasy where the IPO process has already started. 

These IPOs should happen in the first quarter of calendar year 2022 itself. Then there are the likes of Swiggy, Byju’s and Flipkart where the IPO is expected to happen at a later date during the year 2022.

According to a report put out by Kotak Mahindra Capital, the sectoral mix of IPOs in the coming year is likely to be built around digital stories, renewable energy, healthcare, consumer focused plays, realty and specialty chemicals. 

In addition, a number of finance and Fintech plays are also expected to tap the IPO market during the year 2022. However, a lot would predicate on how the markets shape up and the institutional appetite for IPOs.

Out of the $26 billion of IPOs expected to hit the market in 2022, IPOs worth $15 billion are already filed while another set of IPOs worth $11 billion are expected to be filed in the first quarter of 2022. 

The year 2022 is also likely to see a sharp spike in the average size of the IPO to above Rs.2,000 crore per issue. With a surge in demat accounts and trading accounts crossing the 9 crore mark on BSE, the happy days for IPOs in 2022 may be truly on.

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