Initial public offers stayed muted in 2019

Offers-for-sale, however, saw a surge

Even as initial public offers (IPOs) stayed muted in 2019, significant fund-raising through offers-for-sale (OFS) and qualified institutional placements (QIPs) ensured that overall mobilisation remained vibrant in the year.

In 2019, a total of ₹81,174 crore was raised through the public equity markets, which was 28% higher than the ₹63,651 crore raised in calendar year 2018, according to Prime Database. Incidentally, this was about half of the all-time high of ₹1.6 lakh crore seen in 2017.

In terms of IPOs, 2019 saw only 16 main board issues that collectively raised ₹12,362 crore, a decline of 60% compared with last year’s ₹30,959 crore raised from 24 offers. The largest IPO in 2019 was of Sterling & Wilson Solar for ₹2,850 crore. The average deal size was pegged at ₹773 crore.

The overall response to the main board IPOs of 2019 remained quite strong with two issues — IRCTC and Ujjivan Small Finance Bank — getting subscribed over 100 times. Others like CSB Bank, Affle India, Polycab India, Neogen Chemicals and Indiamart Intermesh also registered a strong response.

The year saw 47 companies — with a cumulative issue size of over ₹51,000 crore — allowing regulatory approvals to lapse even as such approvals by the Securities and Exchange Board of India is valid for one year.

SME issues dipped

Interestingly, IPOs in the segment reserved for small and medium enterprises (SMEs) dipped for the first time ever since the platform was launched. In 2019, there were only 50 SME IPOs that collectively raised ₹621 crore, much lower than last year when 141 SME IPOs raised ₹2,287 crore.

Meanwhile, OFS saw a significant jump in the year with a total of ₹25,811 crore raised in 2019 against ₹10,672 crore in 2018. Of this, the government’s divestment accounted for ₹5,871 crore, or 23% of the overall amount. The largest OFS was by Axis Bank, followed by SBI Life Insurance and HDFC Life Insurance.

As many as 11 firms mobilised ₹35,238 crore via QIPs, which was more than double last year’s ₹16,587 crore raised via QIPs.

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Printable version | Feb 21, 2020 10:21:35 PM |

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