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Business News/ Markets / Ipo/  IPO fundraising drops 17% in 2023; issues worth around 70,000 crore in pipeline this year
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IPO fundraising drops 17% in 2023; issues worth around ₹70,000 crore in pipeline this year

57 Indian corporates raised ₹49,434 crore in 2023 through main board IPOs, a 17% decrease from the previous year, according to primedatabase. 182 SME IPOs raised a total of ₹4,681 crore in 2023, a significant increase from the previous year.

57 Indian corporates raised ₹49,434 crore in IPOs in 2023, a 17% decrease from the previous year, as per primedatabase. Photo: iStock (iStock)Premium
57 Indian corporates raised 49,434 crore in IPOs in 2023, a 17% decrease from the previous year, as per primedatabase. Photo: iStock (iStock)

With main board IPOs, 57 Indian corporates raised 49,434 crore in 2023, a 17% decrease from the 59,302 crore raised by 40 IPOs in 2022, according to primedatabase.com.

According to the report, IPO mobilisation rose by 28% from the previous year, excluding the massive LIC IPO that took place in 2022.

The total amount raised for public equity rose by 59% to 1,44,283 crore in 2023 from 90,886 crore in 2022, stated Pranav Haldea, Managing Director of PRIME Database Group.

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The amount of activity in the small and midsize enterprise (SME) segment increased significantly in 2023, with 182 SME IPOs raising a total of 4,681 crore. This is 150% more than the 1,875 crore from 109 IPOs in 2022. The amount of SME IPOs of Shri Balaji Valve, Akanksha Power & Infra, Kay Cee Energy & Infra, and Kaushalya Logistics has been calculated on the basis of lower price band ECB data through October, 2023. Spectrum Talent Management's 99.99 crore IPO was the biggest SME IPO.

87 companies submitted offer documents to SEBI for approval in 2023 (compared to 89 in 2022). In contrast, 40 companies seeking to raise approximately 70,000 crore allowed their approval to lapse in 2023, three companies seeking to raise 3,550 crore withdrew their offer documents, and SEBI returned the offer documents of six more companies trying to raise 10,800 crore.

Also Read: 2023 in review: SME IPOs set a record-breaking year with 179 listings, will the boom continue in new year?

IPO Performance 2023

The biggest mainboard IPO of 2023 was Mankind Pharma, raising 4,326 crore. Tata Technologies ( 3,043 crore) and JSW Infrastructure ( 2,800 crore) came next. Surprisingly, Udayshivakumar Infra raised the least amount of money through an IPO, only raising 66 crore, while Plaza Wires raised 71 crore. Comparing the average deal size to 2022 and 2021, it dropped to 867 crore from 1,483 crore and 1,884 crore, respectively.

In just four months of the year (September: 14, December: 11, November: 8, and August: 7), as many as forty out of the 57 IPOs were wrapped up.

"While we saw companies from multiple sectors tapping the IPO market in 2023, one key sector which had a limited presence was BFSI with just 6,190 crore (or 13 per cent) being raised by companies from this sector (in comparison to 46 per cent in 2022). New age Technology Companies (NATC) too were few at just 2 (Yatra and Mamaearth)," said Haldea.

IPO Subscription 2023

According to primedatabase.com, there was an excellent response from the public overall. Nine IPOs were oversubscribed by more than three times, out of the 57 IPOs, and 41 IPOs received a mega response of more than ten times (of which 16 IPOs more than fifty times).

The reaction from retail investors also rose significantly when compared to 2022. From 5.66 lakh in 2022 to 13.21 lakh on average, more retail applications were submitted. With 52.11 lakhs applications, Tata Technologies received the most from the retail sector. DOMS Industries received 41.30 lakhs, and INOX India received 37.34 lakhs.

Also Read: Kaushalya Logistics IPO allotment to be out soon; GMP steady, steps to check Kaushalya IPO allotment status

IPO Listing Performance 2023

Strong listing performance, according to Haldea, further boosted the IPO response. From 11% in 2022 to 29% in 2023, the average listing gain (based on closing price on listing date) increased.

"Of the 57 IPOs, 40 gave a return of over 10%. Tata Technologies gave a stupendous return of 163% followed Ideaforge (93%) and Utkarsh Small Finance Bank (92%). 53 of the 57 IPOs are trading above the issue price (closing price of 1st January, 2024) with an average return of 46%," added Haldea.

IPO investors

Out of the 57 IPOs that hit the market, 21 of them had a former PE/VC investor who sold IPO shares. A total of 10,968 crore, or 22% of the IPO amount, was offered for sale by these PE/VC investors. The remaining 31% of the IPO proceeds came from private promoter offers for sale worth 15,196 crore.

In contrast, the total fresh amount raised through IPOs in 2023 was 20,662 crore, or 42% of the total, which was a record high in terms of percentage share over the previous seven years.

Also Read: Jyoti CNC Automation IPO: Price band set at 315-331 per share; check GMP, issue details, more

An total of 34% of the public issue amount was subscribed for by anchor investors. The aggregate amount of the public issue was subscribed to by 57% of the qualified institutional buyers, which included Anchors Investors. FPIs, on an overall basis, as anchors and QIB, subscribed to 23% of the issue amount, more than Mutual Funds at 17%.

Outlook for 2024

“The pipeline continues to remain strong. 27 companies proposing to raise 28,500 crore are presently holding SEBI approval while another 36 companies looking to raise about 40,500 crore are awaiting SEBI approval (Out of these 63 companies, 3 are NATCs which are looking to raise roughly 16,000 crore). According to Haldea, the next couple of months should see several IPOs being launched before a pause on account of the general elections," the report said.

Also Read: IPOs in 2024: From Ola Electric to Firstcry here are 11 expected issues in the new year; check out the full list

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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Published: 04 Jan 2024, 11:55 AM IST
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