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Fundraising activity in the Indian equity market was robust for this financial year, with companies collectively raising Rs 1.77 lakh crore through this market. The mammoth amount is over 3 times more than Rs 51,120 crore that was raised during FY17, according to a report by Prime Database.
The database on primary capital market highlighted that the collective amount raised through IPOs, including SME ones, stood at Rs 84,357 crore, while total money raised through qualified institutional placements (QIPs) is to the tune of Rs 62,358 crore.
Additionally, funds raised through bonds is to the tune of Rs 4,861 crore.
Breaking the fundraising on a segmental basis, the firm said that it was by far the best year ever for the IPO market. The previous high, it said was in 2007-08, when capital of Rs 41,323 crore was raised.
Interstingly, number of companies hitting the IPO market was 45 firms. Against this, just 25 companies raised Rs 28,225 crore. On an average, the IPO size was around Rs 1,825 crore against over Rs 1,100 crore in the previous year. The largest IPO was from General Insurance Corp. for Rs.11,257 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 45 IPOs. Offers for sale by such PE/VC investors at Rs.10,831 crore accounted for 13 per cent of the total IPO amount. Offers for sale by promoters at Rs. 52,340 crore accounted for a further 64 per cent of the IPO amount,” the company said in a statement.
Divestments
The company also highlighted that 2017-18 was the best year ever with Rs 98,965 crore being raised by the Government.
“Public Offers (IPOs of HUDCO, Cochin Shipyard, GIC, New India Assurance, Bharat Dynamics, HAL, Mishra Dhatu and OFS of NALCO, RCFL, NFL, HCL, BEL, NTPC, NLC, NMDC) constituted a major share of divestment proceeds at Rs. 38,089 crore (43 per cent). 2017-18 saw as many as 7 PSU IPOs, which was more than the previous 9 years combined,” the statement added.
What lies ahead?
But it is likely that the upcoming year may see more volatility in the secondary market. This could affect fund raising plans of companies as well. “While there are 12 companies holding SEBI approval wanting to raise over Rs 10,395 crore and another 18 companies wanting to raise about Rs. 29,282 crore awaiting SEBI approval, as we have seen in the past, this pipeline may quickly vanish if the volatility and negative sentiment continues," the statement further added.
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