India's IPO (initial public offering) market is heading for a record-breaking year in 2016 with the plethora of activity across sectors driven by the country's upbeat economic sentiment, improving business confidence, easing inflationary pressure and stable inflows of foreign direct investment.

As of October 12, a research by the law firm Baker & McKenzie shows a total of 50 companies have raised US$2.93 billion and another 22 companies are lining up that will raise a further US$2.90 billion, bringing the total estimated deal value at year-end to US$5.83 billion. This is more than double the total volume of US$2.18 billion in 2015 from 71 listings, and the highest since 2011.

But 2017 promises to be an even better year, as a senior banker at the local investment house tells The Asset. "The activity next year will go through the roof because the pipeline is really large," he points out. "At present, the opportunity to arrange a billion dollar deal is very few, but we will see more of those large deals in 2017." 

Financials, insurance, telecommunications, industrials, consumer products and services, and healthcare are expected to be the busiest sectors in the next 12 months. The Baker & McKenzie research says 16 companies are in the listing pipeline domestically in 2017, which will raise as much as US$5.86 billion, including the highly-anticipated US$3 billion IPO for Vodafone. This will be close to the IPO of the state-run Coal India in 2010, which raised US$3.4 billion.

Others in the pipeline include the National Stock Exchange of India (NSE), the Bombay Stock Exchange (BSE), SBI Life Insurance Company, Infrastructure Leasing and Financial Services Limited and PNB Housing Finance Limited.

Domestic listings dominate the Indian IPO landscape. Dual listings on both the BSE and the NSE accounted for 98.8% of the listings by value in 2016, raising a total of US$2.9 billion from 19 IPOs, including the US$909 million deal for ICICI Prudential Life Insurance, which is the country's biggest IPO this year.

The IPO market saw a number of interesting transactions in 2016, including the first private sector bank IPO in a decade for RBL Bank Limited, which raised 12.1 billion rupees (US$181.38 million) in August. The deal garnered an overwhelming demand of about 570 billion rupees – the highest for an IPO since 2010 – making allocation an extremely difficult exercise for its arrangers.