Kotak Investment Banking predicts a robust year for IPO and deal-making activities in 2024, potentially surpassing the record set in 2021. The firm forecasts around $50 billion (approximately ₹4.15 lakh crore) in funds being raised across equity issuances and deals. Managing Director and CEO S Ramesh highlighted that new-age tech companies would lead the primary market’s brisk activities.
**Key Points:**
1. **Market Outlook:**
– The primary market, especially led by new-age tech companies, is expected to witness brisk activities in 2024.
– The overall funding market is likely to experience an inflow of about $50 billion, exceeding the previous record.
2. **Domestic Fund Inflow:**
– In 2023, domestic funds invested USD 25.8 billion in the market.
– The expectation is for this figure to reach USD 50 billion in 2024.
3. **Nifty’s Forward Premium:**
– Nifty’s one-year forward premium is at a record high of 20.1x, the highest among emerging markets.
– There is potential for further increase, considering the 10-year average premium stands at 17.7x.
4. **IPO Market:**
– More large Initial Public Offerings (IPOs) are anticipated to enter the market in 2024.
– Election-related volatility is not expected to impact primary market activities for an extended period.
5. **Record IPO Issuances in 2023:**
– In 2023, there were a total of 59 IPOs, raising close to ₹53,000 crore from the main board.
– Dalal Street ranked as the fourth-largest globally in terms of funds collected after the US, China, and Japan.
6. **Deals and Buyouts:**
– Buyouts totaled USD 55 billion between 2019 and 2023, surpassing the total value of the preceding 15 years.
– Promoter families’ willingness to cede control for value creation is identified as a key factor.
7. **Strategic Fundraising by Corporates:**
– Corporates are increasingly diversifying their fundraising efforts, blending debt and equity strategically to explore investment opportunities.
8. **Unicorn Growth:**
– The domestic market is expected to witness the creation of around 20 unicorns over the next two years, attracting approximately USD 10 billion.
Kotak Investment Banking’s optimistic outlook is driven by the potential for increased market activities, a favorable Nifty forward premium, and various strategic trends in fundraising and corporate actions. The resilience of the primary market and the prospect of significant funds being raised indicate a dynamic year ahead for India’s financial landscape.
