Samvat 2073 sees record IPO fundraising

A total of 29 companies raise ~ 45,802 crore; Financials dominate The year was dominated by insurance IPOs

Samvat 2073 saw record fund raising through the initial public offering (IPO) route. A total of 29 companies mopped up ~45,802 crore, surpassing Samvat 2066 (year 2010-11) when 64 companies had raised ~40,279 crore, data provided by Prime Database show.

Samvat 2073 was dominated by several big-ticket offerings from the insurance companies, a sector which so far had little representation in the domestic market. The year also for the first time saw two IPOs from stock market intermediaries—BSE Ltd and Central Depository Services (CDSL).

The year was also the best in terms of average deal size. General Insurance Corporation’s (GIC Re) ~11,372-crore share sale was the biggest IPO witnessed by the markets during Samvat 2073. It was also the thirdbiggest IPO in the domestic market after Coal India and Reliance Power. The next big IPOs were by SBI Life Insurance and general insurer ICICI Lombard, which raised ~8,386 crore and ~5,700 crore, respectively.

Buoyancy in the secondary markets, attractive listing day gains and good post-listing performance boosted investor sentiment towards the IPO market.

The BSE IPO index, a gauge for the stock performance of the newly listed companies, soared 29 per cent during Samvat 2073, bettering the 19 per cent gain on the Nifty.

“It has been a great period for the Indian primary markets as we saw some big-ticket deals. Most IPOs saw strong demand from across investors segments, particularly mutual funds. The buoyancy in the primary markets will continue in the coming year given the strong issue pipeline,” said Narayanan Sadanandan, group head (investment banking), SBI Caps.

Avenue Supermarts, which operates the D-Mart supermarket chain, was the best-performing IPO stock of the year with the stock seeing four-fold increase over the issue price. Shares of PNB Housing Finance and AU Small Finance too saw their shares gain more than 70 per cent. Finance companies in general accounted for bulk of the fund raising during the past 12 months.

The year saw listing of three insurance companies GIC Re, SBI Life and ICICI Lombard. The government was also proactive on the IPO front as it launched the IPOs of Cochin Shipyard and Hudco, besides GIC Re. It also has filed offer documents for list New India Assurance and Hindustan Aeronautics.

Experts say the financial sector will continue to dominate the IPO market next Samvat as well, as the sector is doing well thanks to the rise in domestic household financial savings and digitisation.

New India Assurance’s ~10,000-crore IPO could hit the market in the coming weeks. HDFC Standard Life will be another marquee insurance IPO that will tap the market soon. The Street will also see the first mutual fund IPO of Reliance Nippon AMC. The Reliance group will also list its insurance arm Reliance Nippon Life soon.