In the primary markets, there were 15 main-board IPOs which collectively raised ₹26,611 crore, up 115% from the ₹12,362 crore raised through 16 IPOs in 2019
MUMBAI: Indian companies managed to raise record high capital in 2020, defying disruptions caused by covid-19 and economic slowdown. Fund raising through public equity markets was at record ₹1.7 trillion in 2020, surpassing previous high of ₹1.6 trillion in 2017, data provided by Prime Database showed.
Capital raised by India Inc in this year is 116% higher than previous year which was at ₹82,241 crore and ₹62,651 crore in 2018.
“Strong retail participation in initial public offerings (IPOs), huge listing gains and highest-ever amount raised through qualified institutional placements (QIPs) and infrastructure investment trust (InvITs)/ real estate investment trusts (ReITs) were the key highlights of the year," Pranav Haldea, Managing Director, Prime Database Group said.
In the primary markets, there were 15 main-board IPOs which collectively raised ₹26,611 crore, rising 115% from the ₹12,362 crore raised through 16 IPOs in 2019. The largest IPO in 2020 was from SBI Cards for ₹10,341 crore. The average deal size was ₹1,774 crore. According to Haldea, response to IPOs was further buoyed by strong listing performance of IPOs of the year.
Of the 14 IPOs which got listed, 10 offered a return of over 10% (based on closing price on listing date). Burger King jumped 131%, followed by Happiest Minds Technologies (123%), Mrs. Bectors Food Specialities (107%), Route Mobile (86%), Rossari Biotech (75%), Chemcon Speciality Chemicals (72%), Gland Pharma (21%, Mazagon Dock (19%), Computer Age Management Services (14%) and Likhitha Infrastructure (14%).
However, activity in SME IPO segment declined in 2020. In the year, there were only 27 SME IPOs, which raised a total of ₹159 crore in comparison to 51 IPOs in 2019 which raised ₹624 crore.
Mobilisation of resources through rights issues was also at record high in 2020, mostly led by the mega ₹53,124 crore by Reliance Industries issue. Data showed, ₹64,984 crore was raised through rights in 2020, up 25% from ₹52,053 crore in 2019. There were 20 companies which raised funds through rights issue in 2020 compared to 12 companies in previous year.
Out of the total, 26 companies mobilized ₹84,501 crore through QIPs, highest ever in a calendar year. This was 140% higher than ₹35,238 crore raised in the previous year. The largest QIP of 2020 was by ICICI Bank raising R. 15,000 crore, accounting for 19% the total QIP amount. QIPs were dominated by banks, NBFCs and telecommunication companies with them accounting for 84% ( ₹67,781 crore) of the overall amount.
The year 2020 also saw the first ever ReIT QIP (Embassy Office Parks raising ₹3,685 crore). The amount raised through InvITs and ReITs saw an increase of 271% to ₹29,715 crore from ₹8,008 crore in 2019. Amount raised through debt private placement reached an all time high of ₹7,51,395 crore (as on 24 December), up from ₹7,09,979 crore in 2019.
According to Haldea, the continuing buoyancy in secondary markets as also the listing performance of IPOs in the last few months have provided impetus to the primary market. The IPO pipeline continues to remain strong with 28 companies holding Sebi approval wanting to raise nearly ₹28,706 crore and another seven companies wanting to raise nearly ₹4,410 crore awaiting market regulator’s approval.