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Jan 01, 2018 03:01 PM IST | Source: Moneycontrol.com

After a stellar 2017, 15 companies in fray to raise up to Rs12000 cr in 2018: Prime Database

The year, again, witnessed significant activity in the SME platform; there were as many as 133 SME IPOs, the highest ever, which collected a total of Rs. 1,679 crore (previous year 67 IPOs for Rs. 537 crore).

Moneycontrol News @moneycontrolcom

By Pranav Haldea

The year 2017 witnessed a raising of Rs.1,61,116 crore through the public equity markets, which was 3.6 times, Rs.44,819 crore that was raised in the preceding year. This is the highest amount ever raised in a calendar year, with the previous highest being Rs. 97,746 crore in 2010.

table1

IPOs:

The year 2017 was also the best year ever for the IPO market by far, the previous high being in 2010 when Rs. 37, 535 crore was raised, almost half the amount.

As many as 36 main-board IPOs (previous year 26 IPOs for Rs.26,494 crore) came to the market collectively raising Rs.67,147 crore. A number of companies and amounts raised through main board IPOs in the last 5 years are given in the table below:

table2

The largest IPO was from General Insurance Corp. for Rs.11,257 crore. The average deal size was a high Rs. 1,865 crore.

A notable feature of the year again was that several companies that hit the market had a prior PE/VC investment. This was true for 17 out of the 36 IPOs.

Offers for sale by such PE/VC investors at Rs.10,221 crore accounted for 15 percent of the total IPO amount. Offers for sale by the promoters at Rs. 42,102 crore accounted for a further 63 percent of the IPO amount.

Out of the 36 IPOs, 29 companies had anchor investors, which collectively subscribed to 29 percent of the total public issue amount.

The domestic institutional investors played a significant role as anchor investors, with their subscription amounting to 13 percent of the amount, compared to 16 percent from FIIs.

The overall response from the public to the mainboard IPOs of the year, according to PRIME, was also very good. While 17 IPOs received a mega response of more than 10 times (Salasar Techno Engineering at 270 times, followed by Astron Paper & Board Mill at 241 times, Capacit'e Infraprojects (130), CDSL (119), MAS Financial Services (91), Dixon Technologies (83), HUDCO (79), Cochin Shipyard (76), D’Mart (73), Godrej Agrovet (68), Reliance Nippon Mutual Fund (57), S.Chand (42), AU Small Finance Bank (38), BSE (36), Prataap Snacks (34), Shankara Building Products (29) and Music Broadcast (28), 6 other IPOs were oversubscribed by more than 3 times. The balance 13 IPOs were oversubscribed between 1 to 3 times.

As far as retail investors are concerned, the year witnessed a very good response from them as well. The highest number of applications was received by Cochin Shipyard at 19.42 lakhs followed by HUDCO (18.74 lakhs), D’mart (17.40 lakhs), CDSL (17.29 lakhs) and Reliance Nippon Mutual Fund (15.60 lakhs).

Response to IPOs was further buoyed by the strong listing performance of IPOs of the year. Of the 36 IPOs which got listed, 18 gave a return of over 10 percent (based on closing price on listing date). Salasar Techno Engineering gave a stupendous return of 152 percent followed by Astron Paper & Board Mill (139 percent), D’Mart (114), CDSL (76), Dixon Technologies (64) and AU Small Finance Bank (51).

SME IPOs:

The year, again, witnessed significant activity in the SME platform; there were as many as 133 SME IPOs, again the highest ever, which collected a total of Rs. 1,679 crore (previous year 67 IPOs for Rs. 537 crore). A number of SME IPOs and amounts raised in last 5 years are given in the table below:

table3

The largest SME IPO in the year, as per PRIME Database, was from Zota Health Care (Rs.56 crore).

Fresh Capital:

Of the total amount of Rs. 1,61,116 crore, the amount raised through fresh capital was Rs. 86,176 crore (53 percent); the remaining Rs. 74,940 crore being offered for sale.

Divestments

2017 was the best year ever with Rs. 73,282 crore being raised by the Government. Public Offers (IPOs of HUDCO, Cochin Shipyard, GIC, New India Assurance and OFS of MOIL, BEL, NALCO, RCFL, NFL, HCL, NTPC, NLC) ) constituted a lion’s share of divestment proceeds at Rs. 33,418 crore (46 per cent) followed by ETFs at Rs. 23,000 crore (31 per cent), Block Deals (SUUTI sales of L&T and ITC) at Rs. 10,844 crore (15 per cent), Buybacks (NHPC, NLC, OIL, EIL, Bharat Dynamics) at Rs.5,627 crore (8 per cent) and sale of shares to employees Rs. 394 crore (1 percent).

The target for fiscal 2017-18 appears very much within reach. Reduction in the Government’s holding in 18 listed CPSEs to 75 per cent (which is also a mandatory SEBI requirement) alone can contribute to Rs. 27,520 crore. Further, the Government has also placed a roadmap for several unlisted profits making CPSEs to get listed in the next two financial years which includes several large companies from insurance and railways sector. Lastly, the Government has also already identified 34 CPSEs for a strategic sale.

Outlook for 2018

The year 2018 looks even more promising. On the IPO front, already at the beginning of the year, there are 15 companies holding SEBI approval wanting to raise nearly Rs. 12,000 crore and another 10 companies wanting to raise nearly Rs. 19,000 crore awaiting SEBI approval. Many more filings are expected in the near future.

Disclaimer: The author is Managing Director of PRIME Database. The views and investment tips expressed by brokerage firms on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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