Indian IPOs to Raise $10 Billion in Next Six Months, says KPMG

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Digital companies in India are going to raise about $10 billion through initial public offerings in the next six months, as investors continue to pump money into the country’s technology sector. “India is unveiling an absolutely new area of growth with these digital companies for hungry global asset managers,” as per KPMG India.

Indian IPOs to Raise $10 Billion in Next Six Months, says KPMG.

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    Digital companies in India are going to raise about $10 billion through initial public offerings in the next six months, as investors continue to pump money into the country’s technology sector. “India is unveiling an absolutely new area of growth with these digital companies for hungry global asset managers,” as per KPMG India.

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    Indian software-as-a-service start-ups have raised a record $4.5 billion from investors in 2021, nearly three times the previous year, led by innovation, access to capital, and a larger market size. As per the report, investments in Indian SaaS firms rise to 165% in 2021 alone. The rising capital inflow in the segment over the last two years has given birth to a string of SaaS unicorns. India now has 13 billion-dollar SaaS firms compared to 2018, creating six more SaaS unicorns being valued at over a billion dollars. There are many companies with $25-30 million Annual Recurring Revenue, and quite a few with over $50 million and even $100 million. Notably, seven to nine Indian SaaS companies have now reached USD 100 million in annual recurring revenue. With an increasing number of world-class founders and strong investor support, Indian SaaS companies are poised to reach USD 30 billion in revenue, capturing 8% to 9% share of the global SaaS market by 2025. India currently has 8,000–9,000 SaaS companies, up from 4,000–5,000 five years ago, of which over 1,300 have raised funds. More than 60 SaaS companies have drawn late-stage capital—Series C or above rounds—over the last five years.

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    Timing the IPOs is another important factor. Companies are tempted to often announce IPOs right after strong quarterly results. Investors must be careful not to extrapolate recent performance into perpetuity and pay a high price.


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    Companies mopped up $9.7 billion through initial public offerings (IPOs) in the first nine months of 2021 in India, the highest amount for the nine-month period in two decades, a report by EY said. As many as 72 IPOs hit the Indian stock market during the period. Globally, there were 1,635 IPOs during the period, the report said. The global IPO market continued to boom through Q3 2021 resulting in the most active third quarter by deal numbers and proceeds in the last 20 years. In India, total proceeds in YTD 2021 are $9.7 billion via 72 IPOs, also being the highest first nine months proceeds in the last 20 years,'. For the nine-month period, India saw the highest number of 130 IPOs in 2018. These sectors were also the largest in terms of issue proceeds in Q3 2021. The three largest IPOs in terms of proceeds were Zomato, Nuvoco Vistas Corp, and Chemplast Sanmar,' the report said.



    The outlook for the next quarter remains positive with several new-economy and technology-driven IPOs expected. Equity indices are at an all-time high giving a boost to the primary market. EY noted that a key driver of activity in the third quarter of 2021 was the rebound of IPO markets in Europe, Middle East, India and Africa (EMEIA), particularly Europe, India and Tel Aviv exchanges, as well as IPO candidates racing to raise capital before expected tapering begins. EY noted that a key driver of activity in the third quarter of 2021 was the rebound of IPO markets in Europe, Middle East, India and Africa (EMEIA), particularly Europe, India and Tel Aviv exchanges, as well as IPO candidates racing to raise capital before expected tapering begins.

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