The year 2015-16 witnessed a total of Rs 48,952 crore being raised through the public equity markets, which is 17 per cent lower than the Rs 58,801 crore raised the preceding year. Despite a volatile and bearish trend in the secondary markets, a total of 24 initial public offers (IPOs) hit the capital market along with 50 issues on the separate segment for small and medium enterprises (SMEs).
According to an analysis by PRIME Database, a primary market tracker, a major revival was witnessed in the IPO market after nearly four dismal years.
The highest-ever mobilisation through IPOs was in 2007-08 at Rs 41,323 crore. In 2015-16, a cumulative amount of Rs 14,461 crore was raised through 21 IPOs and the 50 SME IPOs collectively raised Rs 311 crore.
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The public equity markets include IPOs along with follow-on public offers (FPOs), offers for sale (OFS), qualified institutional placements (QIPs), institutional placement programmes (IPP) and Indian depository receipts (IDRs).
Pranav Haldea, managing director, PRIME Database, says the year could have been better if not for the deferment of several offerings by public sector undertakings (PSUs). The total equity offering mobilisation in 2015-16 was Rs 48,952 crore, it fell short of the 2009-10 record of Rs 86,710 crore by a wide margin.
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According to PRIME Database, a notable feature of the year was that several companies (14 out of 24) that hit the market had a prior investment by private equity or a venture capital fund. Such offer for sale by PE/VC investors at Rs 2,891 crore accounted for 20 per cent of the total IPO amount.
The response from the public to the main board IPOs of the year was good, according to PRIME Database. While seven IPOs received mega response (VRL Logistics at 53 times, followed by Teamlease at 39 times, Alkem Laboratories at 31 times, Power Mech Projects at 26 times, Dr Lal Pathlabs at 24 times, Syngene International at 24 times, and SH Kelkar at 20 times), three other IPOs were oversubscribed by more than three times. The balance 11 IPOs, were oversubscribed between one and three times.
While the average deal size was Rs 603 crore, the largest IPO was from Interglobe Aviation, which raised Rs 3,017 crore. Interglobe Aviation manages private air carrier Indigo.
Fund-raising by listed entities through QIPs also continued in the year, with 20 companies mobilising Rs 14,358 crore. This, however, was a huge fall from the Rs 28,429 crore raised in the previous year, The largest QIP of 2015-16 was from IndusInd Bank that raised Rs 4,328 crore.
The average deal size was Rs 603 crore; Interglobe Aviation raised
the largest IPO
of Rs 3,017 crore