IPO fund-raising is expected to pick up speed as more than 30 firms have filed draft IPO papers with Sebi
Mumbai: The first half of the current financial year witnessed a fivefold jump in fund-raising through the primary markets, with companies raising ₹ 4,950 crore through initial public offerings (IPO), according to Prime Database, a primary market tracker.
In the first half of the last fiscal year, companies raised ₹ 1,017 crore through IPOs, the data shows.
The sharp increase in fund-raising through IPOs comes after a three-year lull in the primary market. In 2011-12, ₹ 4,975 crore was raised through IPOs in the first six months of that fiscal year.
IPO fund-raising is expected to pick up speed as more than 30 firms have filed draft IPO papers with the Securities and Exchange Board of India (Sebi).
“Even though a general positive sentiment prevails in the market, we are yet to see large IPOs hitting the market. The pipeline though looks promising. At present, 19 companies planning to raise ₹ 11,545 crore are holding Sebi approval and another 17 companies intending to raise ₹ 6,795 crore have filed with Sebi and are awaiting approval," said Pranav Haldea, managing director at Prime Database.
Apart from IPOs, a further ₹ 12,916 crore was raised in the last six months through the offer-for-sale (OFS) route.
According to Haldea, the high OFS amount is solely due to the government disinvestment programme, with ₹ 12,733 crore being raised through the OFS issuances of four companies—Indian Oil Corp. Ltd, Rural Electrification Corp. Ltd, Power Finance Corp. Ltd and Dredging Corp. of India Ltd.
“The first half of the fiscal (is) a period where traditionally small amounts have been raised by the government in the last several years. This is the highest amount ever raised in the first half through government disinvestment, the next highest being ₹ 4,035 crore raised in 2009-10," said Haldea.
Between the IPOs and OFS issuances, the first half of the year saw ₹ 17,866 crore raised in the primary market, making this the best first half for the primary market since 2007-08, when ₹ 31,831 crore was raised.