Fund-raising through IPOs hits nine-year high in Q1: Prime Database

Our Bureau Mumbai | Updated on January 17, 2018

With SEBI clearing 19 applications, Prime Database expects further momentum in public issues

Fund-raising through initial public offering in June quarter hit at ₹5,855 crore, the highest in last nine years even as listed companies shied away from tapping institutional investors through qualified institutional placements.

The previous highest-ever quarterly fund-rising through IPO was ₹13,083 crore in June 2007.

The QIP placements by listed companies fell to a four-year low in the June quarter with just three companies raising ₹473 crore against ₹7,460 crore in the same period last year. The largest QIP of ₹262 crore this fiscal was made by Indian Overseas Bank.

Interestingly, the public offers made in the June quarter were largely to provide an exit route to the private equity and venture capital investors. Of the total fund raised through IPO, venture capital and PE investors walked away with ₹2,292 crore, accounting for 40 per cent of the total new fund offering.

‘Worrying’ phenomenon

Pranav Haldea, Managing Director, Prime Database, said it is a worrying factor that not too many companies have shown interest in raising funds from the capital market for expansion.

Of the total amount of ₹9,361 crore raised through equity offers, fresh capital inflow was just ₹2,312 crore while the existing investors walked away with the remaining ₹7,049 crore.

The largest IPO was from Equitas Holdings for ₹2,177 crore.

SMEs too pitch in

Anchor investors and domestic institutional investors played a crucial role in the success of IPOs subscribing to 33 per cent and 21 per cent of the total offering while foreign portfolio investors chipped in with 12 per cent.

The SME platform was also buzzing in the June quarter on the back of bullish trend in stock market with almost 13 SMEs raising ₹127 crore against ₹42 crore mopped up by nine companies in the same period last year.

The dilution of promoters holding in listed companies through offer-for-sale using the exchange platform increased 88 per cent to ₹3,033 crore (₹1,610 crore). The largest OFS of ₹2,735 crore was made by NHPC followed by Indian Oil Corporation’s ₹262 crore.

Haldea expects the IPO market to gain further momentum in the coming days with SEBI clearing applications of 19 companies to raise over ₹7,705 crore and another five companies wanting to raise about ₹3,230 crore waiting for market regulator’s approval.

Published on July 04, 2016

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