Three upcoming new IPOs to look out for in 2024
The Initial Public Offering (IPO) market is buzzing with activity in 2024, as companies prepare to make their stock market debut. An IPO represents a major milestone for companies looking to raise capital by offering shares to the public and listing on stock exchanges. In India, the Securities and Exchange Board of India (SEBI), the market regulator, oversees and sets guidelines for these IPO filings, ensuring transparency and protecting investors.
The anticipation is high as over 65 companies have already filed their documents with SEBI this year, seeking to go public. These IPOs represent diverse sectors—from electric vehicles (EVs) to food delivery giants—making 2024 a significant year for investors and market watchers. Let’s take a look at some upcoming IPOs that are generating excitement in the market.
1. Ather Energy
As India’s electric vehicle industry continues to grow, Ather Energy has emerged as a major player in the electric two-wheeler market. In its draft red herring prospectus filed recently, Ather Energy announced its plans to raise ₹3,100 crore through its IPO. This IPO follows the successful public debut of another EV giant, Ola Electric, last month, further intensifying investor interest in the sector.
Ather Energy’s focus on green energy innovation aligns with India’s broader goals of reducing carbon emissions and promoting sustainable transportation. The company’s leadership in the EV space, coupled with government initiatives supporting electric vehicles, makes Ather Energy a strong contender in the stock market. Investors are eyeing this IPO with enthusiasm, as it offers the potential to capitalise on the rapid growth of India’s EV market.
Why Ather Energy’s IPO could be a game changer:
Growing demand for EVs: As consumers and businesses shift toward greener alternatives, electric vehicles are gaining significant traction in India.
Government support: Policies promoting green energy and offering incentives for EV adoption make Ather Energy’s timing impeccable.
Market leadership: With its innovative products and expanding market share, Ather is well-positioned to dominate the electric two-wheeler space.
Given the increasing focus on sustainable transportation and energy efficiency, Ather Energy’s IPO is poised to attract investors looking for long-term growth in the EV sector.
2. Hyundai Motors
Hyundai Motor India Limited (HMIL), a subsidiary of the South Korean auto giant Hyundai, is preparing to launch what could be one of the largest IPOs in India’s history. The company has filed for approval to sell up to 17.5% of its parent company’s stake in the Indian market. This IPO could raise between ₹20,000 crore to ₹24,000 crore, with a projected valuation of ₹2.4 lakh crore —making it one of India’s largest public offerings since Life Insurance Corporation (LIC) in 2022.
What makes this IPO unique is that it marks the first major listing of an automaker in India since Maruti Suzuki went public in 2003. Hyundai’s move signals its confidence in India’s automotive market, especially as the company looks to further solidify its presence in one of the world’s fastest-growing economies.
Key highlights of Hyundai’s upcoming IPO:
Huge market valuation: Hyundai’s IPO is expected to reach a valuation of ₹2.4 lakh crore, showcasing its strength in the Indian automotive market.
Offer-for-Sale structure: Unlike other IPOs that involve fresh equity issues, Hyundai’s IPO will consist solely of an Offer-for-Sale (OFS) of around 14 crore shares, with no new shares being issued.
Automotive innovation: Hyundai’s focus on introducing electric and hybrid models in India could offer investors exposure to both traditional and green automotive markets.
Hyundai’s IPO is a historic event for India’s stock market and automotive industry, positioning the company for further expansion and innovation.
3. Swiggy
Swiggy, one of India’s largest food delivery platforms, is gearing up for its much-anticipated IPO. Since its founding in 2014, Swiggy has grown rapidly, dominating India’s food delivery and instant commerce sectors. With the IPO, Swiggy aims to raise ₹10,000 crore, including ₹3,750 crore in fresh shares and ₹6,640 crore in shares sold by existing investors.
Swiggy’s rise has been remarkable, as it expanded its offerings to include groceries and other essential services under its Instamart brand. The IPO comes at a time when the food delivery and instant commerce market is seeing fierce competition, particularly with Zomato, Swiggy’s chief rival, already listed on the stock market.
What makes Swiggy’s IPO exciting:
Dominance in food delivery: Swiggy has carved out a strong position in the market, competing head-to-head with Zomato. Its expansive service offerings provide a solid foundation for future growth.
Expanding revenue streams: Beyond food delivery, Swiggy’s foray into instant commerce with Instamart opens up new revenue streams and growth opportunities.
Startup ecosystem milestone: As one of India’s leading startups, Swiggy’s public debut represents a significant milestone for the country’s vibrant startup ecosystem.
Swiggy’s IPO is generating a lot of excitement, especially among investors looking to gain exposure to India’s growing digital economy. However, it’s important to evaluate whether this IPO aligns with your investment strategy.
How to pick an IPO
When considering an investment in an Initial Public Offering (IPO), it’s essential to conduct thorough due diligence to maximize your chances of success. You can start by evaluating the financial health of the company—review financial statements, profit margins, revenue, and debt levels to gauge stability. Examine the management team’s experience and reputation, as strong leadership is crucial for growth. Conduct a SWOT analysis to identify the company's strengths, weaknesses, opportunities, and threats. Compare the IPO’s valuation with industry peers to determine if it is fairly priced, and be mindful of current market conditions, as they can significantly influence IPO performance. Understand the purpose behind the fundraising—whether for expansion or debt settlement—indicating growth potential. Lastly, resist the temptation of FOMO (fear of missing out) by thoroughly reading the Red Herring Prospectus to gain a comprehensive understanding of the company. By following these guidelines, you can make informed decisions and enhance your investment prospects in the IPO landscape.
Final thoughts: Riding the IPO wave in 2024
The year 2024 is shaping up to be an exciting one for the Indian IPO market, with companies from diverse sectors—electric vehicles, automotive, and digital services—seeking to go public. Whether you’re looking for exposure to the booming EV market through Ather Energy, the historic IPO of Hyundai Motors, or the dynamic growth of Swiggy, these IPOs offer a range of opportunities for investors.
However, it’s crucial to remember that IPOs carry inherent risks, and thorough research is necessary before making any investment decision. Investors should assess each company’s fundamentals, growth potential, and market dynamics. Whether you’re a seasoned investor or new to the IPO market, 2024 offers a chance to capitalise on the growth of key industries in India.
With the SEBI’s regulations ensuring transparency and investor protection, the stage is set for another remarkable year in the Indian stock market. As always, diversify your portfolio and stay informed to make the most of the upcoming IPOs in 2024.
