Indian equity markets were able to better their performance when it came to raising money via IPOs, OFS and QIPs along with other capital raising tools in the last financial year 2019-20, injecting a total of Rs 91,670 crore, up 62 per cent from that in the previous fiscal.
Indian equity markets were able to better their performance when it came to raising money via IPOs, OFS and QIPs along with other capital raising tools in the last financial year 2019-20, injecting a total of Rs 91,670 crore, up 62 per cent from that in the previous fiscal. Bulk of the money was raised by the thirteen Qualified Institutional Placements (QIP) that the public equity markets saw, as the funds raised reached a staggering Rs 51,216 crore. The largest QIP of the fiscal was from telecom major Bharti Airtel, which managed to raise Rs 14,400 crore, accounting for 28 per cent of the total QIP amount raised, according to Prime Database.
During the financial year 2019-20, equity markets witnessed 13 IPOs among which SBI Cards and Payments Services was the biggest. In total the 13 IPOs were able to gather Rs 20,350 crore, an increase of 38 per cent from the previous year’s Rs 14,719 crore, that too with one less IPO than the previous year. The Highest amount that Indian equity markets have seen coming in from IPOs was in the Financial year 2017-18 when 45 companies entered the market raising Rs 81,553 crore.
According to PrimeDatabase, the response to the IPOs in the fiscal was largely good. IRCTC was subscribed the most at 109 times followed by Ujjivan Small Finance Bank that was subscribed 100 times. A total of 8 IPOs received bids over 10 times. According to Pranav Haldea, Managing Director, PRIME Database Group, response to IPOs was further buoyed by strong listing performance of IPOs of the year. “Of the 13 IPOs which got listed, 7 gave a return of over 10 per cent (based on closing price on listing date). IRCTC gave a stupendous return of 128 per cent,” he said.
In 2019-20, for the first time since trading in the SME platform started, activity declined in the segment. There were only 45 SME IPOs, which collected a total of Rs. 436 crore in comparison to 106 IPOs in 2018-19 which collected Rs. 1,620 crore, making it the worst performance by SME IPOs in the last four years.
During the period under review, Offer for Sale (OFS) saw a decline as only Rs 17,326 crore were raised through this method. Government of India’s divestment plans made up for Rs 1,134 crore of the total money raised via OFS. SBI Life Insurance and Avenue Supermarts were the biggest OFS raising more than Rs 3,400 crore each.
The biggest contribution came from QIPs that mobilized Rs 51,216 crore, 388 per cent more than the Rs 10,489 crore raised in the previous year. The total amount raised by equity markets the previous year was just a notch up at Rs 56,485 crore. Although Bharti Airtel was the biggest contributor to the segment, it was dominated by banks and NBFCs.
Talking about what is in store for the new financial year, Haldea said, “Just when things were starting to look up for the primary market, the coronavirus pandemic outbreak has wreaked havoc. The IPO pipeline continues to remain strong with 26 companies holding SEBI approval wanting to raise nearly Rs. 26,056 crore and another 6 companies wanting to raise nearly Rs. 7,500 crore awaiting SEBI approval. However, it is highly unlikely that any of these issues will hit the market till the time the uncertainty around coronavirus ends.”