37 IPOs garner $1.2 billion in Q1, take H1 total to $4 billion

New Delhi: A total of 37 initial public offerings (IPOs) that garnered $1.2 billion during April-June, took the total proceeds through this route to $4 billion in the first half of 2018, says an EY report. According to the report, 32 initial public offerings in the SME markets raised USD 98.7 million and five in the main market raised $1.1 billion in the second quarter this year.

Hong Kong was the most active exchange with 97 IPOs during January-June followed by India (94 IPOs) and NASDAQ (66 IPOs) at second and third positions, respectively. Though the second quarter saw 9 per cent increase year-on-year in deal numbers, there was a decline of 35 per cent vis-a-vis the previous quarter (January-March) following the global economic cues.

The report also noted that during January-June, 94 IPOs raised $4 billion. "Inflows of domestic capital remains strong leading to many opportunities for companies to take the initial public offerings route. However, uncertainty surrounding next year's general elections may impact initial public offering activities in rest of the 2018," the report noted.

The industrial sector was the most active sector in terms of number of issues and proceeds with 12 initial public offerings that raised $590 million, followed by materials (6 initial public offerings, $95 million) and Consumer Staples (5 initial public offerings, $11 million).

"Investor confidence and the increasing domestic capital inflows will help boost the initial public offering volumes across sectors in India. The effect of geo-political uncertainty and national elections next year remains to be seen in the rest of 2018," said Sandip Khetan, EY India IPO Leader.

Jigar Parikh, Partner, Financial Accounting Advisory Services (FAAS), EY India said: "Sebi (ICDR) (Amendment) Regulations, 2018 have brought some welcome changes in listing requirements and corporate governance norms. "These measures will boost investor confidence and will bring Indian regulations closer to global norms, fostering increased activity on initial public offering front in India in years to come."

The new SEBI (ICDR) regulations would require companies to prepare restated financial statements for three years, instead of five, significantly reducing the efforts for companies who are in the process of getting listed. In addition, the corporate governance standards and expectations from companies in India are continuing to be enhanced.