THE ROLE OF INVESTMENT BANKS IN INDIA’S IPO BOOM

The fourth quarter of 2024 witnessed an increase in mainboard IPOs in India, with 21 offerings compared to just 2 during the same period in 2023. These factors have significantly enhanced investor confidence, attracting both retail and institutional investors seeking quick returns. The post-COVID financial landscape, the rise of digitalization in the banking sector, abundant liquidity, and increased financial inclusion further contribute to it. With the help of investment banks, companies understand the benefits of going public, and the rise in initial public offerings (IPOs) offers significant opportunities for raising capital, encouraging investor participation, and contributing to India's economic growth and development.
Investment banks play a crucial role in the Initial Public Offering (IPO) process, serving as intermediaries that guide companies through the complex process of going public. They also conduct valuations to set appropriate share prices while balancing the company’s interests with market demand. Investment banks then market the IPO to generate investor interest, prepare essential regulatory documents, and create a prospectus for potential investors. On the IPO day, they manage share pricing and allocation, along with any secondary offering.
Investment banks primarily serve as intermediaries between corporations and investors during initial public offerings (IPOs) by providing essential underwriting services. They collaborate with companies to.
Determine an optimal IPO price through methods like book-building or fixed-price offerings by understanding factors such as market conditions, financial health, and growth prospects. A well-priced IPO attracts investors while maximizing capital raised, and underwriters help navigate the complexities of valuation and investor sentiment.