Stocks

62% more money raised in stock markets in 2019-2020, QIPs dominate: Prime Database

Our Bureau Mumbai | Updated on April 01, 2020 Published on April 01, 2020

Financial year 2019-20 witnessed a raising of ₹91,670 crore through the public equity markets which was 62 per cent higher than ₹56,485 crore that was raised in 2018-19, said Pranav Haldea, Managing Director, Prime Database Group. The mobilisation, however, fell 48 per cent short than the all-time high amount of ₹1,75,680 crore raised in 2017-18.

The largest IPO in 2019-20 was from SBI Cards & Payment Services for ₹10,341 crore. The average deal size was ₹1,565 crore.

Only four out of 13 IPOs that hit the market had a prior PE/VC investment, a notable change from previous years. Offers for sale by such PE/VC investors at ₹7,842 crore accounted for 39 per cent of the total IPO amount. Offers for sale by promoters at ₹4,160 crore accounted for a further 20 per cent of the IPO amount.

Anchor investors

Out of the 13 IPOs, 11 companies had anchor investors, which collectively subscribed to 32 per cent of the total public issue amount. Contribution from FPIs was 21 per cent while contribution from domestic institutional investors was 11 per cent of the amount.

The overall response from the public to the mainboard IPOs of the year, according to primedatabase.com, was good. While eight IPOs received a mega response of more than 10 times, IRCTC at 109 times followed by Ujjivan Small Finance Bank (100 times), CSB Bank (48 times), Affle (48 times), Polycab (36 times), Neogen Chemicals (29 times), Indiamart Intermesh (20 times) and SBI Cards (19 times), one other IPO was oversubscribed by more than three times. The balance four IPOs were oversubscribed between one and three times.

As far as retail investors are concerned, the year witnessed a good response from them as well. The highest number of applications was received by SBI Cards at 26.95 lakh followed by Ujjivan Small Finance Bank (14.36 lakh), IRCTC (12.94 lakh), Polycab (11.37 lakh) and CSB Bank (9.20 lakh).

According to Haldea, response to IPOs was further buoyed by strong listing performance of IPOs of the year. Of the 13 IPOs which got listed, seven gave a return of over 10 per cent (based on closing price on listing date).

Stupendous returns

IRCTC gave a stupendous returns of 128 per cent followed by CSB Bank (54 per cent), Ujjivan Small Finance Bank (51), Indiamart Intermesh (34), Neogen Chemicals (23), Polycab (22) and Affle (17). Moreover, unlike in previous years, despite the ongoing coronavirus pandemic and its subsequent impact on the market, seven of the 13 IPOs are presently still trading above the issue price (between 8 and 207 per cent above the issue price (closing price of March 31, 2020)).

At the other end of the spectrum, during 2019-20, 50 companies looking to raise over ₹34,633 crore allowed their SEBI approval to lapse, despite approvals being valid for a period of one year, and after having incurred a lot of time and costs.

SME IPOs

For the first time since the SME platform started, activity in this segment declined; there were only 45 SME IPOs, which collected a total of ₹436 crore in comparison to 106 IPOs in 2018-19 which collected ₹1,620 crore.

According to primedatabase.com, offers for sale (OFS) through stock exchanges, which is for dilution of promoters’ holdings, saw a decrease, from ₹21,686 crore raised in 2018-19 to ₹17,326 crore raised in 2019-20. Of this, the Government’s divestment accounted for ₹1,134 crore or just 7 per cent of the overall amount.

The largest OFS was that of SBI Life Insurance in September (₹3,524 crore) followed by Avenue Supermarts (₹3,428 crore) and HDFC Asset Management (₹2,039 crore). OFS accounted for 19 per cent of the total year’s public equity markets amount.

QIPs

Thirteen companies mobilised ₹51,216 crore through QIPs. This was 388 per cent higher than ₹10,489 crore raised in the previous year. The largest QIP of 2019-20 was from Bharti Airtel raising ₹14,400 crore, accounting for 28 per cent of the total QIP amount. QIPs were dominated by banks, NBFCs and telecommunication companies accounting for 79 per cent (₹40,256 crore) of the overall amount.

IPPs

No company used the IPP route.

InvITs/REITs: The amount raised through InvITs and REITs saw a decrease of 71 per cent from the previous year, from ₹7,971 crore in 2018-19 to only ₹2,306 crore in 2019-20.

Fresh capital

Of the total amount of ₹91,670 crore, the fresh capital amount was ₹55,932 crore (61 per cent); the remaining ₹35,738 crore being offers for sale.

Published on April 01, 2020

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.