Nine companies have raised a record Rs 36,720 crore via initial public offerings (IPOs) in November, which is the highest single month fundraise seen in a decade. The largest IPO to hit the market during the month was Paytm.
During the previous IPO boom in November 2017, companies had raised ₹18,824 crore, while ₹18,242 crore was raised in August 2021, as per data from Prime Database. Paytm’s ₹18,300 crore IPO — the largest in the history — accounted for almost 50% of the funds raised during the month.
The appetite among investors for new-age businesses remains strong and listing day gains have drawn new retail investors to these issues. Companies have already raised more than ₹1 lakh crore in the calendar year so far and the pipeline will continue to be strong in the long run despite some headwinds in the near term.
Issues of three companies will hit the markets in the first week of December. Anand Rathi Wealth, Tega Industries, and Star Health Insurance will cumulatively aim to raise more than ₹8,500 crore. Furthermore, more than 35 companies have filed IPO papers with the market regulator. Besides, 37 other companies have already received approval to float their initial share sales.
“The fundraising was largely dominated by Paytm — the largest IPO so far in the markets and other companies. Over the last few months, we have seen a consistent deal flow with several companies filing for IPOs with Sebi, and markets have also done well,” Pranav Haldea, managing director, Prime Database, told FE.
However, the Indian benchmarks have witnessed a correction of more than 3% each amid weak global markets and persistent outflows from foreign portfolio investors (FPI) from secondary markets in November. On the other hand, FPIs pulled out a large amount from secondary markets and parked a sum of ₹10,109 crore in the primary market during the same period, data from primedatabase.com showed.
Companies are likely to wait and watch in December, given that the new Omicron variant of the novel coronavirus has spooked investors globally. Companies and bankers will closely monitor the situation and some firms might delay or push forward their listing plans, analysts and bankers, told FE. “Very little is still known about the new variant and what impact it may likely have. We might see the volatility continuing until that time and in that case, you can expect some pause in the primary market issuances as well,” Haldea said.
Mobikwik, a fintech company with a business model similar to Paytm, has already deferred its plan to list on the exchanges after Paytm’s poor listing. The company had filed preliminary papers with the Securities and Exchange Board of India to raise ₹1,900 crore via the share sale.