Cos raise `31K cr in FY21 amid IPO gold rush

Cos raise `31K cr in FY21 amid IPO gold rush

New Delhi: Global liquidity and bull run in domestic equity market helped Indian companies raise over Rs 31,000 crore through initial share-sale in the ongoing fiscal year and the IPO pipeline remains strong for 2021-22 too, experts said on Sunday. This also marks the highest fund-raising through IPOs in last three years.

Sandeep Bhardwaj, CEO, Retail at IIFL Securities said the IPO pipeline remains strong with 28 companies holding markets regulator Sebi's approval for raising nearly Rs 28,710 crore through initial share-sale going forward.

Moreover, companies including LIC, HDB Financial Services, NCDEX, ESAF Small Finance Bank are expected to come out with their IPOs in 2021-22, said Rajendra Naik, Managing Director - Investment Banking, Centrum Capital.

According to an analysis of data available with the stock exchanges, 30 firms raised Rs 31,277 crore through initial public offerings (IPOs) in 2020-21, significantly higher than Rs 20,352 crore mopped up through 13 initial share-sales in the preceding fiscal year.

Prior to that, 14 companies had floated IPOs in 2018-19 to raise Rs 14,719 crore and 45 main-board IPOs during 2017-18 collectively raised Rs 82,109 crore. Apart from IPOs, 2020-21 witnessed Rs 15,000-crore follow-on public offer of Yes Bank.

Adding depth to the IPO markets, companies from diverse sectors like jewellery, technology, specialty chemicals, banking and financial services have made their way to the IPO space during the period under review.

"The biggest factor driving companies to fund-raising through IPO is the bull run in the stock market. Improved sentiments in the secondary market acted as a support for the primary market," Naik said.

Acoording to him, ample liquidity, better than expected economic recovery uplifted the market sentiment and the same was visible in the primary market.

Making similar statement, IIFL Securities' Bhardwaj said availability of ample liquidity in the system across the world, new sectors businesses with immense opportunities and optimism around the Indian demography, demand and growth story triggered the IPOs' gold rush.

VK Vijaykumar, Chief Investment Strategist at Geojit Financial Services believes there is exuberance in the market and this has attracted large number of retail investors into the market.

He, further, said new retail investors are actively and a bit irrationally applying for IPOs and suggested that such investors should be discrete in

selecting IPOs.

Kaushlendra Singh Sengar, Founder and CEO at INVEST19 said that FD(Fixed deposit) interest rates are going down in every decade. This is also one of the factors wherein users are diverting their investment from FD to equities.

Primary capital raised through IPOs were used to shore up balance sheets to weather any incremental stress from economic activity going down and private equity players utilised this opportunity to monetise their investments through an offer-for-sale (OFS), Ajay Saraf, Head - Investment Banking & Institutional Equities at ICICI Securities, said.

Next Story
Share it