Rs 81,174 crore was raised through public equity markets in 2019, led by a sharp increase in offer for sale (OFS) and qualified institutional placements (QIPs). This represents a 28 percent rise over Rs 63,651 crore raised in 2018, according to data compiled by Prime Database. But the proceeds slipped by 49 percent and paled in comparison to the all-time high amount of Rs 1,60,032 crore raised in 2017.OFS and QIPs lead the way
OFS through stock exchanges, which is for dilution of promoters ’ holdings, rose to Rs 25,811 crore in 2019 from Rs 10,672 crore raised in 2018. Of this, divestment by the government accounted for Rs 5,871 crore, or 23 percent of the overall amount. The largest OFS was that of Axis Bank (Specified Undertaking Of The Unit Trust of India) in February (Rs 5,358 crore), followed by SBI Life Insurance (Rs 3,524 crore) and HDFC Life Insurance (Rs 3,366 crore). OFS accounted for 32 percent of funds raised through public equity markets in 2019.
Eleven companies mobilised Rs 35,238 crore through QIPs in 2019. This was 112 percent higher than Rs 16,587 crore raised in the previous year. The largest QIP of 2019 was from Axis Bank, raising Rs 12,500 crore. A bulk of offerings via this route were by banks, NBFCs and real estate companies.The IPO report card
Only 16 main-board initial public offerings (IPOs) came to the market, collectively raising Rs 12,362 crore. This was a 60 percent decline from the Rs 30,959 crore raised through 24 IPOs in 2018. The largest IPO in 2019 was from Sterling & Wilson Solar for Rs 2,850 crore. The average deal size was Rs 773 crore. Of the 15 IPOs, which got listed, seven returned over 10 percent (based on their closing price on listing date). IRCTC gave a stupendous return of 128 percent, followed by CSB Bank (54 percent), Ujjivan Small Finance Bank (51 percent), IndiaMART InterMESH (34 percent), Neogen Chemicals (23 percent), Polycab India (22 percent) and Affle (17 percent).
Moreover, unlike in previous years, only two of the 15 IPOs are presently trading below their issue price. The balance 13 IPOs are trading between 21 and 170 percent above their issue price (closing price of December 23rd). “Over subscription and strong listing gains by a bulk of these companies is the first sign of a primary market revival,” says Pranav Haldea, Managing Director, PRIME Database. On the other hand, during 2019, as many as 47 companies looking to raise over Rs 51,000 crore allowed their SEBI approval to lapse, which is a ‘worrying trend’, cautioned Haldea.
For the first time since the SME platform started, activity in this segment declined. There were only 50 SME IPOs, which collected a total of Rs 621 crore, in comparison to 141 IPOs in 2018, which collected Rs 2,287 crore. 2019 saw the first ever ReIT listing (Embassy Office Parks raising Rs 3,874 crore).
2019 also saw Rs 52,053 crore being raised via rights issues, which was 176 percent higher than Rs 18,827 crore that was raised in 2018. This was dominated by the two large issues of Vodafone Idea (Rs 25,000 crore) and Bharti Airtel (Rs 24,939 crore). Twelve companies used the rights issues route in 2019 as compared to 13 in the previous year.