Investors enjoyed a joy ride in 2017 mounting over the record-breaking IPO (initial public offering) rally along with record high share buybacks which also helped substantially to book profits.
Investors enjoyed a joy ride in 2017 mounting over the record-breaking IPO (initial public offering) rally along with record high share buybacks which also helped substantially to book profits. In the 12-month period of 2017, IPOs and share buybacks were at the highest in the history of Indian capital markets. Last year, about Rs 65,000 crore have been raised with few of the largest IPOs India has ever seen, namely from GIC’s Rs 11,370 crore public offer to HDFC Standard Life’s Rs 8,700 crore share sale. In 2017, IPOs and share buybacks went neck to neck, as against Rs 65,000 crore raised through selling shares in the primary market, an estimate of about Rs 55,000 crore was spent to purchase back the existing equity shares.
Over the course of one year in 2017, capital markets have seen quite big IPOs, in terms of money mobilised and also the record subscription which crossed even 100 times in some cases. Insurers such as GIC Re, The New India Assurance Company, HDFC Standard Life, SBI Life, ICICI Lombard General Insurance collectively raised about Rs 43,770 crore out of the total Rs 65,000 crore garnered by several corporates. Public offers such as Avenue Supermarts, Salasar Techno Engineering, Capacit’e Infraprojects, CDSL, MAS Financial Services, Dixon Technologies attracted the highest number of investors, being subscribed over 100 times.
Apart from the high-rise in raising money through primary market, share buybacks also made it to the record list in 2017 with the corporates having surplus cash reserves spending over Rs 55,000 crore to repurchase their shares. In 2017, the big-three IT firms of India, Tata Consultancy Services, Infosys and Wipro collectively spent about 30,000 crore to repurchase their respective shares. Other IT companies such as MindTree, MphasiS, Hexaware Technologies and HCL Technologies also purchased back their shares. Share buyback across all major IT companies benefited the investors as the big IT companies such as Infosys, TCS and Wipro floor prices at a premium.
Meanwhile, existing equities too celebrated the rally with Sensex and Nifty newer record highs day after day. Across the sectors, stocks specific to real estate, bank, metal, financial services emerged as the top performers in 2017 vastly outperforming Sensex and Nifty. In 2017, Sensex and Nifty have returned about 26-27% with the blue-chip stocks such as Maruti Suzuki, HDFC Bank, HDFC, Tata Steel, DLF, Bharti Airtel, Indiabulls Housing Finance, Yes Bank, HUL, Kotak Mahindra Bank, IndusInd Bank and Reliance Industries rising between 30% to 90%.