There have been at least 10 initial public offers (IPOs) till date – with the most recent one witnessed just last month – wherein retail investors participated in huge numbers with the cumulative size of the retail applications exceeding Rs 10,000 crore.
This assumes significance as a recent consultation paper by the Securities and Exchange Board of India (SEBI) highlighted industry concerns related to retail response in mega-sized IPOs while proposing to reduce the retail quota in public issues.
Though the proposal was rolled back – while allowing companies to list with a small quantum of dilution – data clearly shows that retail response is not always a concern even in instances when the IPO size runs into thousands of crores.
Data from PRIME Database shows that the highest-ever quantum of retail bids was seen in 2008 when Reliance Power launched its IPO to raise Rs 10,123 crore. The retail portion was subscribed 13.57 times with 46.23 lakh applications with the cumulative bid amount pegged at nearly Rs 40,000 crore.
While no other IPO has come close to touching that retail number again, there have been quite a few that saw the retail response in the range of Rs 10,000 crore and Rs 17,000 crore each.
For instance, last year saw the IPO of Waaree Energies hitting the market to raise Rs 4,321 crore. More than 70 lakh retail applications were received with the total size of bids pegged at Rs 16,470 crore.
The year 2024 was witness to three other IPOs – Bajaj Housing Finance, KRN Heat Exchanger & Refrigeration and Unimech Aerospace & Manufacturing – wherein the cumulative worth of retail bids was in excess of Rs 10,000 crore each.
Interestingly, the IPO size of KRN Heat Exchanger & Refrigeration and Unimech Aerospace & Manufacturing was Rs 342 crore and Rs 500 crore, respectively.
Industry experts say that retail response is not a concern if the issue is reasonably priced and the outlook for the company and the sector is robust.
“We have to acknowledge that retail investors do like to invest in IPOs and the data shows that even large issues, if attractively priced, have generated tremendous response from retail,” says Pranav Haldea, Managing Director, PRIME Database.
“With SEBI allowing companies to come to the market with a smaller float, I think the concerns of the industry around the retail demand have been largely put to rest,” he adds.
Most recently, NSDL saw nearly 46 lakh retail applications pour in with the total bid size pegged at nearly Rs 10,500 crore even as the overall IPO size was only Rs 4,011 crore. In the past, Tata Technologies, MOIL, Reliance Petroleum, and Coal India also saw huge response from retail investors.
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