Amid the outbreak of COVID-19 and deterioration of the macroeconomic environment across the world, India Inc's fundraising from the equity market hit an all-time high in FY21, PRIME Database has said.
"Indian corporates raised an all-time high amount of Rs 1,88,900 crore through public equity markets. This was more than double of the Rs 91,670 crore that was raised in 2019-20," according to Pranav Haldea, Managing Director, PRIME Database Group. The previous highest amount raised in a financial year was Rs 1,75,680 crore in 2017-18.
PRIME Database provides data on the capital market. As per its website, it offers other services too, including database creation and management, content generation, website development and management, information consulting and data cleaning and standardisation to other organisations.
"Of the total amount of Rs 1,88,900 crore, the fresh capital amount was Rs 1,36,992 crore (73 percent); the remaining Rs 51,908 crore being offered for sale," said Haldea.
Strong retail participation in IPOs, huge listing gains and the highest-ever amount raised through QIPs and InvITs/ReITs were among the key highlights of FY21.
Main board IPOs
As many as 30 main-board initial public offerings (IPOs) hit the market, collectively raising about Rs 31,268 crore in FY21. This was an increase of 54 percent from the Rs 20,350 crore raised through 13 IPOs in FY20, Haldea said.
Of these, 18 IPOs received mega response of more than 10 times, while four offerings were oversubscribed by more than three times and eight were oversubscribed between one and three times, Haldea said.
The largest IPO in 2020-21 was from Gland Pharma for Rs 6,480 crore. The average deal size was Rs 1,042 crore.
Activity in the SME IPO segment further declined year-on-year in FY21. "There were only 28 SME IPOs, which collected a total of Rs 243 crore in comparison to 45 IPOs in 2019-20 which collected Rs 436 crore," Haldea said.
Offers for sale (OFS), which is for the dilution of promoters’ holdings, saw an increase from Rs 17,326 crore raised in 2019-20 to Rs 30,114 crore in 2020-21. Of this, the government’s divestment accounted for Rs 19,927 crore, or 66 percent of the overall amount, data from the PRIME Database shows.
The largest OFS was that of Tata Communications (Rs 5,386 crore) followed by Hindustan Aeronautics (Rs 4,961 crore) and IRCTC (Rs 4,408 crore). OFS accounted for 11 percent of the total year’s public equity markets amount, data from primedatabase.com showed.
Follow-on public offers (FPOs) made a comeback after several years. This was primarily on account of the Yes Bank FPO, which raised Rs 15,000 crore. Overall, two companies mobilised Rs 15,029 crore through FPOs, PRIME Database data shows.
Some 31 companies raised Rs 78,731 crore through qualified institutional placements (QIPs), the highest ever in a financial year. "This was 54 percent higher than Rs 51,216 crore raised in the previous year," said Haldea.
The largest QIP of 2020-21 was from ICICI Bank that raised Rs 15,000 crore, accounting for 19 percent of the total QIP amount. QIPs were dominated by banks, NBFCs and real estate companies,accounting for 84 percent (Rs 66,141 crore) of the overall amount.
The year also saw the first-ever ReIT QIP (Embassy Office Parks raising Rs 3,685 crore), Haldea said.
The amount raised through infrastructure investment trusts (InvITs) and real estate investment trusts (REITs) saw an increase of 1,353 percent to an all-time high of Rs 33,515 crore from Rs 2,306 crore in 2019-20.
The FY21 did not see a significant amount of fundraising through divestments, with only Rs 33,159 crore being raised by the government.
"Public offers (IPOs of IRFC, Mazagon Dock, Railtel and OFS of Bharat Dynamics, HAL, IRCON International, IRCTC, RVNL, SAIL and TATA Communications) at Rs 22,594 crore (68 percent) was the most used mode followed by buyback (EIL, GAIL, HPCL, KIOCL, NMDC, NTPC, NALCO and RITES) at Rs 6,441 crore (19 percent)," said Haldea.
Mobilisation of resources through rights issues, according to primedatabase.com, reached an all-time high of Rs 64,256 crore in 2020-21, which 15 percent higher than Rs 55,998 crore raised in 2019-20.
The public bond market saw a near 31 percent decrease with 18 issues raising Rs 10,488 crore in comparison to 35 issues raising Rs 15,146 crore the previous year. The largest issue was from PFC, raising Rs 4,429 crore, data from PRIME Database shows.
Debt private placements
The amount raised through debt private placement reached an all-time high of Rs 7,02,697 crore (as of March 26), up from Rs 6,75,236 in 2019-20.
"This was mobilised by 656 institutions and corporates. The highest mobilisation through debt private placements during the year was by NABARD (Rs 59,072 crore) followed by REC (Rs 50,370 crore), HDFC (Rs 49,843 crore), NHAI (Rs 44,953 crore) and PFC (Rs 40,966 crore)," said Haldea.
Indian companies also raised Rs 2.30 lakh crores through overseas borrowing, down 55 percent from Rs 5.07 lakh crores in 2019-20, Haldea said.Disclaimer: The above report is compiled from a press release sent by primedatabase.com. Moneycontrol advises users to check with certified experts before taking any investment decisions.