IPO fund-raising up 60% in FY20

Biding time: The year also saw about 50 companies allowing the regulatory approval to lapse.

Biding time: The year also saw about 50 companies allowing the regulatory approval to lapse.   | Photo Credit: AP

Despite the market plunge, seven of the 13 IPOs are trading above issue price

Fund raising via public equity markets rose by more than 60% in 2019-20 even as the fiscal ended on a highly volatile note with a drop of almost 30% in the Sensex.

In 2019-20, a total of ₹91,670 crore was raised, which was 62% higher than the previous fiscal’s ₹56,485 crore, as per data from Prime Database.

The mobilisation, however, was 48% lower than the all-time high of ₹1.76 lakh crore raised in 2017-18.

The fiscal 2019-20 saw 13 main board public issues raising a cumulative amount of ₹20,350 crore, an increase of 38% from the ₹14,719 crore raised through 14 initial public offers (IPOs) in 2018-19.

Further, the largest IPO in 2019-20 was that of SBI Cards & Payment Services, which was worth ₹10,341 crore, though the average deal size was ₹1,565 crore.

Interestingly, the overall response to main board IPOs was decent as eight of the IPOs were subscribed more than 10 times each with IRCTC topping the list by getting subscribed 109 times.

The subscription was also a factor of overall market buoyancy as only the last quarter of the fiscal saw a sudden downturn due to concerns related to global slowdown and COVID-19.

The buoyancy was also reflected in the share price returns as shares of seven of the 13 IPOs gained more than 10% on the listing day.

Moreover, despite the ongoing pandemic and its subsequent impact on the markets, seven of the 13 IPOs are currently still trading above the issue price.

The year also saw about 50 companies, with a cumulative offer size worth ₹34,663 crore, allowing the regulatory approval to lapse. All IPOs need to get a nod from the Securities and Exchange Board of India (SEBI), that is valid for one year.

Meanwhile, for the first time since the dedicated platform for small and medium enterprises (SMEs) was launched in 2012, the activity in the segment declined with only 45 SME IPOs, with total fund-raising of ₹436 crore, hitting the market. It was significantly lower than the FY19’s ₹1,620 crore.

Going ahead, as per Prime Database, the IPO pipeline continues to remain strong with 26 firms holding SEBI approval, wanting to raise almost ₹26,056 crore and another six entities, wanting to raise almost ₹7,500 crore, awaiting SEBI approval.

However, it is highly unlikely that any of these issues will hit the market till the time the uncertainty around pandemic ends, it said.

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Printable version | Jul 5, 2020 6:25:34 AM |

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