Fundraise by companies from initial public offerings hit the highest level in a decade in the first eight months of the current financial year, said the Economic Survey for 2021-22.
The survey, released on January 31, noted that 75 companies raised Rs 89,066 crore from the primary market through initial public offerings in April-November as against Rs 14,733 crore in the same period in 2020.
“The money raised by IPOs has been greater than what has been raised in any year in the last decade by a large margin,” the Economic Survey said.
The survey quoting data from the Securities and Exchange Board of India showed that eight IPOs were subscribed more than 100 times in 2021, while 11 IPOs were subscribed between 50 and 100 times in the same period.
“The tremendous response by all categories of investors in IPOs of companies was reflective of not only the confidence in markets, but also that in corporate sector performance and prospects of the economy in the long run,” the survey said.
Not only IPOs, even money raised by Indian companies from preferential issues of equity shares also surged to Rs 43,004 crore in April-November of 2021-22 from Rs 25,701 crore in the same period a year ago.
Overall, companies raised Rs. 1.81 lakh crore in the first eight months of the current financial year from the primary market as against Rs. 1.72 lakh crore in the same period last year.
The survey said that the current financial year has been “exceptional” for the Indian primary market with a boom in fundraising through IPOs by many new-age companies.
The Economic Survey also acknowledged that retail participation in the equity market surged in the current financial year. Citing data from the National Stock Exchange, it said that participation of retail investors in NSE’s turnover rose to 44.7 percent in April-October 2021 from 38.8 percent in 2019-20.“The substantial increase in share of individual investors in 2020-21 and 2021-22 can partly be ascribed to the increase in new investor registrations witnessed since February 2020,” the survey said.