In the financial year ended March 31, companies raised as much as `14,508 crore through initial public offerings (IPOs), the highest in five years. Nearly 22 companies, of which 21 were oversubscribed, took the IPO route to raise capital. From large-sized issues to small, FY16 saw more than 66% of the issues raise over `500 crore via IPOs.
The increased traction in primary markets comes at a time when benchmark indices yielded negative returns during the period. The benchmark Sensex lost 9.35% during the year, Bloomberg data showed.
With the market regulator, Securities and Exchange Board of India (Sebi) approving norms for companies to launch their IPOs in an electronic format, to reduce time taken between the share sale and the listing, to enhance the reach of retail investors in the share sale and reduce costs, more companies have been going for the IPO route.
After a two year gap of no infrastructure companies tapping the capital markets, 33% of the companies belonged to the infrastructure sector. Sadbhav Infrastructure raised `425 crore through its public offer. FY16 also saw the debut of nearly four healthcare IPOs including Dr Lal Path Labs, Alkem Laboratories, Narayana Hrudayalaya and HealthCare Global, which recently debuted on the bourses. InterGlobe Aviation listed on the bourses during the year. The company tapped primary markets to raise `3,010 crore – the highest by any company in nearly two years. The issue sailed through due to strong institutional interest. However, the retail book of the issue remained undersubscribed. The year also saw the first e-commerce IPO as Ahmedabad based online portal Infibeam took the public issue route to raise `450 crore.
