India's IPO market is poised to set new records with a boom.

This report is from the CNBC "Inside India" newsletter, which provides timely and insightful news and market commentary on the emerging powerhouse and the big businesses driving its rapid growth. If you find it interesting, you can subscribe here.

The big story

Those seeking to capitalize on India's growth have typically targeted well-known conglomerates, such as and those run by the country's tycoons, or tech startups revolutionizing daily life.

In recent years, there has been a shift in the focus of companies, who are aiming to capitalize on India's growth story by going public.

In 2023, the South Asian giant experienced a surge in listings, reaching a nine-year high of 238, and raising a staggering $7.35 billion, according to FactSet data.

Last year, the listing of a manufacturer of condoms and pregnancy test kits, which operates in a less prominent segment, re-kindled interest in initial public offerings due to its steady revenue growth and healthy profits.

The real takeaway was that attractive opportunities could be found in seemingly ordinary segments of an economy experiencing phenomenal growth.

This year, India's IPO market has experienced a surge, with 130 new listings and 313 billion Indian rupees raised, as per FactSet.

According to Neil Bahal, founder of Negen Capital, CNBC's Inside India expects a record-breaking year for India with a substantial number of IPOs and private equity exits.

"The IPOs are not due to the belief of tech company executives that they should raise funds from the stock market rather than private equity. Instead, there are strong fundamentals in equity markets, favorable policies from SEBI, high retail participation, and diverse opportunities," he stated.

IPO frenzy

The tech startups in India are on the brink of experiencing a surge in listings, with companies such as Swiggy, ixigo, Unicommerce, and MobiKwik at different stages of the process.

According to Dhruba Jyoti Sengupta from Wrise Private Middle East, venture capital and private equity players view India's stock markets as a lucrative opportunity to exit their investments and capitalize on the participation of retail investors. Sengupta predicts that Ola Electric, Aakash Educational Services, and PhonePe will eventually go public.

Ola Electric has obtained SEBI's approval for a $660 million IPO, and Sengupta predicts that the electric two-wheeler manufacturer will have a valuation of "at least" $4 billion to $5 billion.

Despite being involved in its parent company Byju's bankruptcy case, Aakash Educational Services has been performing exceptionally well, with many of its students achieving high scores on exams, according to Sengupta. There are rumors that the company plans to go public this year to raise funds quickly.

Sengupta predicts that PhonePe, an Indian e-commerce marketplace, will enter the market soon due to its "brilliant ecosystem." Although the company has stated that it has no plans to list, Sengupta believes that its expansion into the United Arab Emirates and Sri Lanka are indications of a company preparing for an IPO.

Growing foreign listings

Foreign companies are increasingly looking to tap into India's booming stock markets.

This week, Hyundai India's $2.5 billion IPO made headlines, with reports stating that it could become one of the country's largest listings after 's 2022 offering.

The Indian stock exchange has a history of listing foreign companies' Indian subsidiaries, including , , , and .

Vikas Pershad, M&G Investment's Asian Equities Portfolio Manager, believes that India's markets are strengthened by such listings. He predicts that foreign companies will likely follow this route once they achieve a certain scale.

Expensive market?

Concerns over high stock market valuations sometimes dampen the optimism about India's IPO boom, leading to speculation about a potential bubble.

Malcolm Dorson, a global emerging markets strategist, acknowledges that India's current price-to-earnings ratio of around 21 times is somewhat expensive.

He claims that it offers good value relative to other emerging markets.

Dorson from Global X stated on CNBC's Inside India that when we examine India, we observe sustained economic growth, increased earnings per share, and higher levels of profitability. Mirae Asset, Global X's parent and one of India's largest foreign asset managers, supports this viewpoint.

"Beyond multiples and price, we must consider intrinsic value. India presents quality growth opportunities now."

Need to know

Investing in India, the world's fastest-growing major economy, is considered the "ideal" emerging market. CNBC Pro has evaluated the benefits and risks of investing in this booming economy, and provides guidance on how global investors can participate.

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The aviation sector in India faces the biggest threat from external pressures, including fuel costs and a strong U.S. dollar, according to Vistara Airlines CEO Vinod Kannan. However, the aviation boom continues to grow due to a growing middle-income population that will see a substantial increase in household earnings.

What happened in the markets?

In the week after the Indian election results, Indian stocks advanced with more caution. The index is expected to increase by 0.5% this week. The index has already gained 7.67% this year.

The Indian government bond yield has remained nearly flat since last week, with a yield of 7.01%.

This week on Biz Focus Hub, UBS's chief India economist Tanvee Gupta Jain stated that she anticipates India's inflation rate to remain below 4% in the third quarter. However, she also predicted that it may increase in the second half of the following year.

Sumant Sinha, CEO of Nasdaq-listed ReNew Energy Global, stated that the new government led by Prime Minister Narendra Modi will continue to be as supportive of the renewable energy sector as it has been in the past. He believes that Modi will fulfill his commitment of generating 500 gigawatts of clean power capacity by 2030.

What's happening next week?

The Reserve Bank of India (RBI) will meet to establish interest rates on Friday, according to economists surveyed by Reuters, who predict the RBI will maintain rates at 6.50%.

It is predicted that the U.S. Federal Reserve will maintain rates during its upcoming meeting.