BSE CEO says over 90 companies have filed draft papers for IPOs to raise ₹1 lakh crore in 2025

India’s record-breaking capital raising spree will likely continue in 2025 given the strong pipeline of companies seeking to go public, the head of the country’s oldest exchange told Reuters.

“There are more than 90 companies that have already filed their draft prospectuses with the regulator,” BSE CEO Sundararaman Ramamurthy said on Thursday, hoping to raise an estimated Rs 1 trillion ($11.65 billion) sometime this year. Are.”

Last year, 91 large companies went public on the BSE, formerly known as the Bombay Stock Exchange, and the NSE or National Stock Exchange, raising a record Rs 1.6 trillion through initial public offerings (IPOs), according to analytics firm Prime Database. .

Overall public equity fund raising more than doubled to Rs 3.73 trillion.

Ramamurthy said the IPO boom has led to more offers for sale (OFS), where large shareholders sell existing shares instead of fresh issues, with the proceeds going to them, which provides companies with capital for investment.

“I would like to see a reduction in OFS percentage and an increase in fresh capital raising.”

According to East India Securities, BSE will earn Rs 1.57 billion from listing fees in the first half of 2024-25. This compares with fees of Rs 1.3 billion reported a year earlier.

Ramamurthy declined to comment on BSE’s financial position ahead of its upcoming quarterly earnings.

However, profits from the IPO pipeline are declining due to stricter regulations for derivatives trading.

Ramamurthy said that in anticipation of the new rules, the notional value of derivatives traded in India has fallen by 40% since September, while premiums have fallen by 15%-20%.

Further downside can be expected as three of the six new rules introduced by the market regulator will come into effect by April.

“We will have to wait till April to assess the final impact,” Ramamurthy said.

BSE shares have risen about 10% since November 20, when the rules were implemented, as analysts expect less impact on the exchange compared to NSE, which has larger derivatives trading volumes.

Diversifying revenue streams Ramamurthy said BSE, which earns a major share of revenue from transaction fees and services to companies including listings, is looking at diversifying its income streams.

It aims to grow its index business, which licenses indices used by funds to benchmark investments.

“We have launched 15 indices since the middle of last year and there is scope to continue working on that front,” he said.

It is also looking to expand its co-location services, which are in demand due to high-frequency and algorithmic trading growth.

“There is good potential to generate revenue (in co-location), but we have not taken any decision yet. We will consider it after April when the market volumes recover.”