India's fundraising through IPOs could touch Rs 4 lakh crore in 2027, according to Mahavir Lunawat, the founder of Pantomath Financial Services Group, as rising domestic liquidity, growing mutual fund participation and interest from FIIs come together to create room for a larger primary market.
At the current juncture, Lunawat said that the market is only scratching the surface. Based on the country's capital formation needs and investor demand, the IPO activity over the next few years is likely to see a sharp expansion.
Q: We are seeing a flurry of IPOs across sizes, but the concentration is in small- and mid-sized offerings. As a result, there are concerns about the quality of companies coming to market. What is your assessment?
I think the data suggests otherwise. IPOs have generated better returns this year than the secondary market. Smaller IPOs have also generated better returns than larger ones, as some reports have shown. I would not judge the quality of an IPO simply by its size.
Overall, society has matured, and so have the markets. We need to look at the liquidity available on one side and India's GDP growth aspirations on the other.