The current market buoyancy has sizeably boosted the success rate of companies launching initial public offerings (IPOs). In a remarkable shift, only 10 companies have failed to launch their maiden offerings after securing regulatory approvals. In comparison, 39 companies let their approvals lapse last calendar year, and 30 did so in 2022.
The IPO filing-to-approval lapsing ratio this year is the best in three years, underscoring the improvement in the IPO market's buoyancy. Market players attribute the higher success ratio to favourable valuations in the secondary market. Potential new listings take cues from already listed peers, which, in many cases, are trading at record-high price-to-earnings multiples.
"We hardly see any company letting their Securities and Exchange Board of India (Sebi) approval lapse as market conditions are good and valuation expectations are being met," said Deepak Kaushik, group head of equity capital markets at SBI Capital Markets.
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