Cos raised 1.77tr through equities

The total funds raised by India Inc through the issue of equity shares in FY18 has reached an all time high of ` 1.77 lakh crore (` 1.77tr) with the initial public offer ( IPO) being the most preferred instrument followed by qualified institutional placement ( QIP) and offer for sale ( OFS). The total funds mobilised in FY18 according to Prime Database is almost 3.46 times the amount raised in the previous financial year.

While the amount raised through IPOs including public offers from small and medium enterprises ( SME) stood at ` 84,357 crore, corporate India mopped up ` 62,358 crore through qualified institutional placement ( QIP) and ` 18,438 crore through offer for sale.

“This is the highest amount ever raised in a financial year, with the previous highest being ` 86,710 crore in 2009- 10,” said Pranav Haldea, MD, Prime Database.

A notable feature of FY18 according to Mr Haldea was the impressive response witnessed by a majority of public offers with heavy participation from small investors.

Out of 45 IPOs, 17 saw a mega response and got subscribed by more than 10 times, 8 IPOs were oversubscribed by more than 3 times and 14 IPOs were oversubscribed in between 1 and 3 times.

With regards to the participation of retail investors, the public offer from Cochin Shipyard received highest number of applications at 19.42 lakhs followed by HUDCO ( 18.74 lakhs), CDSL ( 17.29 lakhs) and Reliance Nippon ( 15.60 lakhs).

However, FY19 is likely to remain little challenging for fund raising due to volatility in the secondary market and the possibility of a lower return from equity market as compared to last year.

“2018- 19 is likely to see more volatility in the secondary market, which shall affect fund raising plans of companies as well. While there are 12 companies holding Sebi approval wanting to raise over ` 10,395 crore and another 18 companies wanting to raise about ` 29,282 crore awaiting Sebi approval, as we have seen in the past, this pipeline may quickly vanish if the volatility and negative sentiment continues,” Mr Haldea added.

A notable feature of FY18 was the impressive response witnessed by a majority of public offers with heavy participation from small investors, according to Mr Haldea. However, FY19 is likely to remain little challenging for fund raising due to volatility.