IPO fundraising tops ₹27,000 cr in Apr-Jul
NEW DELHI: As many as 12 firms have raised a staggering ₹27,000 crore through initial public offers (IPOs) route in the first four months of the ongoing fiscal, and the pipeline is pretty strong for the remaining part of the year too.
Further to this, initial share sales of four other companies Devyani International, Windlas Biotech, Krsnna Diagnostics and Exxaro Tiles are schedule to open on August 4.
Hemang Kapasi, Head of Equities at Sanctum Wealth Management, said that as many as 40 IPOs are lined up for rest of the year looking to raise ₹70,000 crore.
Further, a lot of retail investors associated brands are going to list on the Indian bourses. The initial share sales of Paytm, Mobikwik, Policy Bazaar, CarTrade Tech, Delhivery and Nykaa will keep investors busy in the current fiscal, Kaushlendra Singh Sengar, founder and CEO at INVEST19, said. He further said the main reason for opting the IPO route is the recent bull run in the Indian markets. The bull market has facilitated companies to raise funds from equity market at high valuations.
The companies are diluting their stakes at higher valuations which pushed promoters to file their preliminary papers with capital markets regulator Sebi, he added.
Sandeep Matta, founder, TRADEIT Investment Advisor, said “exuberant equity bull run, higher participation of first-time investors, expectation of quick money, rewarding exit for existing investors, access to unconditional money are the major reasons behind companies going public”.
According to an analysis of data available with the stock exchanges, 12 companies have raised ₹27,052 crore through IPOs in the first four months (April-July) of the current fiscal 2021-22. Apart from these, PowerGrid InvIT, the infrastructure investment trust (InvIT) sponsored by the Power Grid Corporation of India, mopped up ₹7,735 crore through its IPO. This comes following a fund raising of ₹31,277 crore by 30 firms in the entire 2020-21.
The fundraise numbers look high compared to last couple of financial years when capital markets were subdued. In 2019-20, a total of 13 companies collected ₹20,352 crore through IPOs, while 14 firms had floated IPOs in 2018-19 to raise ₹14,719 crore. The financial year 2017-18 saw 45 main-board IPOs collectively mobilising ₹82,109 crore.
Adding depth to the IPO markets, companies from diverse sectors like, technology, specialty chemicals, dairy, pharmaceutical have made their way to the IPO space during the period under review. Also, many tech startups are opting for the IPO route, which is a great thing for the industry, because it sets a benchmark, Prateek Singh, founder and CEO of LearnApp.com, said.
“Right from seed funding to an IPO is a full cycle for a startup and it is very encouraging to see that kind of growth,” he added..