Bombay:
The primary issuance market has hit an all-time high with 63 companies raising Rs 1,18,704 crore through the main-board initial public offerings (IPOs) so far in 2021, which is nearly 4.5 times more than the Rs 26,613 crore. crore raised through 15 issues. in 2020 and nearly double the previous best of Rs 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 loss-making technology start-ups in the new era, along with strong retail participation, and the resulting massive stock market gains were the key highlights of the year. . Another highlight was that only 51 percent or Rs 1,03,621 crore of the total Rs 2,02,009 crore was new capital increase and the remaining Rs 98,388 crore was put up for sale.
Overall, public equity fund raising crossed the Rs 2 lakh crore mark at Rs 2,02,009 crore in 2021 so far, which is above the previous high of Rs 1,76,914 crore in 2020, according to Prime’s report database.
Haldea said the biggest IPOs on the motherboard were One97 Communications (Paytm) spending at Rs 18,300 crore, followed by delivery app Zomato at over Rs 9,300 crore. The average issue size this year was a high of Rs 1,884 crore.
Of the 59 numbers for which data is now available, 36 have been oversubscribed more than 10 times, with six more than 100 times oversubscribed and eight more than three times oversubscribed. The balance 15 was 1-3 times oversubscribed.
The biggest feature of the year was the massive retail response as the average retail filings were 14.36 lakh, compared to 12.77 lakh in 2020 and 4.05 lakh in 2019. The highest number of retail filings was for Glenmark Life Sciences ( 33.95 lakh) followed by Devyani International (32.67 lakh) and Latent View (31.87 lakh).
This had the number of shares requested by retail at a whopping 135 percent of the IPO mobilization (156 percent in 2020). However, the total retail allocation was only Rs 24,292 crore or just 20 percent of the total IPO mobilization, up from 32 percent in 2020.
Haldea added that the success of the IPO was further supported by strong listing performance. Of the 58 issues, 34 gave a return of more than 10 percent (based on the closing price on the listing date).
Sigachi Industries achieved the highest return of 270 percent, followed by Paras Defense (185 percent) and Latent View (148 percent). While the average listing gain was 32 percent, compared to 44 percent in 2020 and 19 percent in 2019. No fewer than 40 of the 58 issues are trading above the issue price on December 22.
On the other hand, 25 out of the 63 issues had a previous PE/VC investment leading to massive sales offers by them worth Rs 24,106 crore, accounting for 20 percent of the total IPO amount. Offers for sale by promoters amounted to Rs 31,704 crore or 27 percent of the total fundraising. On the other hand, the new capital increase was high at Rs 43,324 crore, which is greater than the past eight years combined.
Anchor investors collectively subscribed for 39 percent of the issuance, while foreign portfolio investors (FPIs) played a dominant role as anchor investors with 24 percent of the total, followed by mutual funds (MFs) with 11 percent. Qualified institutional buyers (including anchor investors) subscribed as a whole for 69 percent of the total amount.
The year also saw a record number of IPO applications as 115 companies submitted their bid documents to Sebi, which Haldea says is more than double the previous two years when there were just 50 applications in total.
The IPO pipeline remains strong with 35 companies now having Sebi approval to raise about Rs 50,000 crore and a further 33 waiting for the Sebi kink to raise about Rs 60,000 crore, excluding the highly anticipated LIC issue that will trillion should exceed.
On the other hand, SME spending also increased in the year with 55 spending raising Rs 727 crore, more than double the 27 spending garnering Rs 159 crore in 2020.