Overwhelming response from investors to SME offers in FY17

Fiscal 2016-17 was a bumper year for public offers by small and medium companies. According to data compiled by Prime Database, there were as many as 78 SME IPOs which collected a total of ₹807 crore in FY17, as against 50 IPOs raising ₹311 crore in FY16.

In fact, this is a huge increase from FY12 when there was just one issue which raised ₹7 crore.

An SME IPO last week by Udaipur-based Bohra Industries mopped up more than ₹80 crore, after its offer was subscribed 3.23 times. The issue also saw the first-ever investment by a foreign portfolio investor in an SME IPO.

On the main-board, there were 25 companies going public this year and they collected ₹28,211 crore from the market, almost double that of the ₹14,500 crore raised via this route last year.

Dip in OFS via exchange On the whole, 2016-17 witnessed ₹51,288 crore through the public equity markets, 5 per cent higher than ₹48,991 crore that was raised in the preceding year. Including the public bond market, however, the total for the fiscal stood at ₹80,741 crore, down from ₹82,803 crore the previous year.

According to Prime Database, offer-for-sale through stock exchanges, which is for dilution of promoters’ holdings, saw a major decrease from ₹19,822 crore raised last year to just ₹8,390 crore this year. This too was accounted for primarily by the government’s divestment at ₹6,374 crore (76 per cent of the overall amount).

The largest OFS was that of NHPC in April (₹2,735 crore). Meanwhile, already listed companies continued to raise funds from institutional investors through the QIP route, with 22 companies mobilising ₹13,871 crore, a minor fall from the ₹14,358 crore raised in the previous year. The largest QIP of 2016-17 was from YES Bank raising ₹4,907 crore, accounting for 35 per cent of the total qualified institutional placement (QIP) amount.

As for divestments, 2016-17 was the best ever year with ₹40,997 crore being raised by the government, which was 90 per cent of the revised targeted amount of ₹45,500 crore and 73 per cent of the original target of ₹56,500 crore for the year. Buybacks of Nalco, MOIL, NMDC, CIL, and BEL constituted the lion’s share of divestment with proceeds to the tune of ₹15,645 crore.

According to Pranav Haldea, Managing Director, Prime Database, 2017-18 also looks promising, with 13 companies holding SEBI’s approval to raise over ₹9,230 crore and another 10 companies wanting to raise about ₹16,736 crore awaiting SEBI approval.

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