Funds raised by Indian companies through main board initial public offerings (IPOs) saw a 26 percent decline in the first half of the financial year 2023-24 (H1 FY24) compared to the same period the year before, according to PRIME Database. The 31 companies that floated IPOs during H1 FY24 raised Rs 26,300 crore cumulatively down from Rs 35,456 crore mobilised by 14 IPOs in H1 FY23.
However, excluding the mega LIC IPO, which took place last year raising around Rs 20,500 crore, IPO mobilisation has seen a 76 percent increase this fiscal year.
Including the SME IPOs, the total figure for H1 FY23 and H1 FY24 stood at Rs 36,594 crore and Rs 29,032 crore, respectively.
Overall public equity fundraising — including through offer-for-sale (OFS), qualified institutional placement (QIP), and InvIT/ ReIT — reached Rs 73,747 crore during H1 FY24. This is a 69 percent increase from the Rs 43,694 crore raised during the same period a year before.
Interestingly, of the total 31 IPOs that hit the market in H1 FY24, as many as 21 took place in just August and September. The largest IPO during the period was from Mankind Pharma (Rs 4,326 crore), followed by JSW Infrastructure (Rs 2,800 crore). On the other end, the smallest IPO was from Plaza Wires, which raised Rs 67 crore.
Low participation from BFSI, new-age tech firmsAlthough companies from multiple sectors have raised funds through IPOs in H1 FY24, the banking, financial services and insurance (BFSI) sector has largely stayed away, with just Rs 1,525 crore (6 percent) being raised. In comparison, companies from this sector accounted for 61 percent of the funds raised during the same period last year.
Meanwhile, only one out of the 31 companies that went public during the period was a new-age technology company (NATC), pointing to a continuing slowdown in IPOs in this sector.
High level of public participation
“Of the 28 IPOs for which data is currently available, 19 received a mega response of more than 10 times (of which nine IPOs attracted more than 50 times), while four IPOs were oversubscribed by more than three times. The balance of five IPOs was oversubscribed between one and three times. The relatively new HNI (high net worth individual) segment (Rs 2-Rs 10 lakh) saw an encouraging response, with 17 IPOs receiving a response of more than 10 times,” said the primary market tracker in a bulletin.
The average number of applications from retail investors has increased to 10.02 lakh, in comparison to 7.57 lakh in FY23. The Ideaforge IPO received the maximum number of applications from retail investors at 22.29 lakh, followed by Aeroflex at 21.62 lakh, and SBFC Finance at 20.19 lakh.
Average listing gains, which reached 29.44 percent compared to 11.56 percent in H1 FY23, further buoyed investor interest in IPOs.
Outlook for the second half of the year
“Notwithstanding the present volatility in the secondary market, the next four to five months are likely to see several IPOs being launched before a pause on account of the general elections,” said Pranav Haldea, Managing Director, PRIME Database Group.
As many as 28 companies proposing to raise Rs 38,000 crore currently hold SEBI approval. Further, 41 more companies looking to raise about Rs 44,000 crore are awaiting the SEBI nod.
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