The increase was led by a revival in the primary markets and also an increase in the amount raised through offers for sale on the stock exchanges
Mumbai: Indian firms raised ₹ 68,608 crore through the public equity markets in 2015, 76% higher than the ₹ 39,067 crore that was raised in the previous year, according to data from Prime Database.
The increase was led by a revival in the primary markets and also an increase in the amount raised through offers for sale (OFS) on the stock exchanges.
“A major revival was witnessed in the IPO market after 4 disappointing years. Despite turbulent secondary markets, 21 main-board IPOs came to the market collectively raising ₹ 13,602 crore," said Pranav Haldea, managing director, Prime Database. The highest-ever mobilization through IPOs was in 2010 at ₹ 37,535 crore.
OFS issues, which are used for dilution of promoters’ holdings, saw a jump from just ₹ 5,000 crore raised last year to ₹ 35,564 crore this year. However, more than half the capital raised through OFS came from a single issue of Coal India Ltd where the government sold shares worth ₹ 22,558 crore. Over the last four months the government has not managed to launch a single disinvestment issue.
“The year could have been even better but for the deferment of several public sector undertaking (PSU) offerings. The year, of course, fell short of ₹ 97,746 crore, the highest amount that has ever been raised during 2010," said Pranav Haldea, managing director at Prime Database.
Even though a significant amount of capital has been raised through capital markets this year, listed companies did not manage to raise much capital through qualified institutional placements (QIPs).
During the year 32 companies managed to raise ₹ 19,182 crore as compared to ₹ 31,684 crore last year. The largest QIP this year was launched by IndusInd Bank Ltd, raising ₹ 4,328 crore.
“As the new government came and market sentiments improved most of the debt laden companies raised capital through QIP but soon they realized its not enough to pay back their debt and those very companies have resorted to asset sale this year," said an investment banker from a foreign bank who request anonymity as he is not authorized to speak to the media.
With fresh investments from the private sector still on hold, growth capital requirements have also been low.
With a number of initial public offerings lined for 2016, capital raising could remain high. The government, too, is trying to revive its divestment program.
“2016 looks even more promising. Already at the beginning of the year, there are 20 companies holding Sebi approval wanting to raise ₹ 7,315 crore and another 11 companies wanting to raise ₹ 5,445 crore awaiting Sebi approval. Many more filings are expected in the near future," Haldea added.
According to Prime Database, JM Financial Ltd leads the league table for all the equity issuances undertaken this year, followed by Kotak Mahindra Capital Co. Ltd and Deutsche Bank Ltd.
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