63 IPO issuers mop up record ₹1.18 lakh crore in 2021: Report
MUMBAI: The primary issue market has hit an all-time high with 63 corporates raising ₹1,18,704 crore through mainboard initial public offerings (IPOs) so far in 2021, which is nearly 4.5 times more than the ₹26,613 crore raised through 15 issues in 2020 and almost double of the previous best of ₹68,827 crore in 2017, according to a report.
Pranav Haldea, managing director of Prime Database Group, said the IPO frenzy was driven by new-age loss-making technology start-ups along with strong retail participation, and the resultant massive listing gains were the key highlights of the year. Another highlight was only 51% or ₹1,03,621 crore of the total ₹2,02,009 crore was fresh capital raising and the remaining ₹98,388 crore were offers for sale.
Overall, public equity fundraising crossed the ₹2 lakh crore mark at ₹2,02,009 crore in 2021 so far, which is higher than the previous high of ₹1,76,914 crore in 2020, according to the report by Prime Database.
Haldea said the largest mainboard IPOs were One97 Communications
(Paytm) issue of ₹18,300 crore, followed by delivery app Zomato at over ₹9,300 crore. The average issue size was a high ₹1,884 crore this year.
Of the 59 issues for which data is available now, 36 received more than 10 times oversubscription, of which six were more than 100 times, while eight were oversubscribed by more than three times. The balance 15 were oversubscribed 1-3 times. The biggest hallmark of the year was the huge retail response as average retail applications stood at 14.36 lakh, in comparison to 12.77 lakh in 2020 and 4.05 lakh in 2019. The highest number of retail applications was for Glenmark Life Sciences (33.95 lakh) followed by Devyani International (32.67 lakh) and Latent
View (31.87 lakh).
This had the amount of shares applied for by retail at a huge 135% of the IPO mobilisation (156% in 2020). However, the total allocation to retail was only ₹24,292 crore or just 20 per cent of the total IPO mobilisation, down from 32% in 2020.
Haldea added that IPO success was further buoyed by strong listing performance. Of the 58 issues, 34 gave a return of over 10 per cent (based on the closing price on listing date).
Sigachi Industries gave the highest return of 270%, followed by Paras Defence (185%) and Latent View (148%). While the average listing gain was 32%, compared to 44% in 2020 and 19% in 2019. However, as much as 40 of the 58 issues are trading above the issue price as of December 22.