With the initial public offering (IPO) of SBI Life getting fully-subscribed, fund-raising through the IPO route so far in 2017 has crossed Rs 30,000 crore. Since the beginning of the year, 23 firms have together mopped up Rs 30,115 crore. In 2016, 26 firms had raised Rs 26,494 crore. Listing gains and returns by newly listed companies as also the positive sentiment in the broader market are among the reasons attributed to the trend. Most companies — 14 out of 20 companies — that made their debut on the exchanges this year have listed at a premium. Avenue Supermarts, the owner of the D-Mart brand, listed at a whopping 102% above its issue price. This is the biggest listing day opening in 12 years after Nandan Exim whose stock opened at 140% premium to its issue price of `20 in June 2005.
Consumer electronics manufacturer Dixon Technologies was listed on Monday at a premium of 54% to its issue price. The newly listed companies have given good returns to investors; the BSE IPO Index, a gauge of newly listed companies, rose by 39.96% year-to-date while the benchmark Sensex rose by 20% in the same period. More than half of the total money raised through IPO was by financial services companies. BSE, Hudco, ICICI Lombard, SBI Life, AU Small Finance Bank and CDSL are some of the financial services companies who completed their IPO in the last six months.
However, a huge chunk of funds raised through IPO was via the offer-for-sale (OFS) route. The initial share sale of SBI Life and ICICI Lombard, the biggest issues so far this year, were entirely via OFS. While SBI Life raised Rs 8,400 crore, ICICI Lombard garnered Rs 5,700 crore. Eris Lifesciences, BSE, and AU Small Finance Bank listings were through OFS. The offerings of CL Educate, Shankara Building Products and S Chand and Company had a significant OFS portion. Market participants said the buoyancy in the primary market is set to continue with at least a dozen more companies gearing up to hit the market.The government will launch the IPO of New India Assurance and General Insurance Corporation, among others. Among the private sector companies MAS Financials, HDFC Life, Indian Energy Exchange, Mahindra Logistics and Khadims are expected to hit the markets this year.