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Thursday, July 18, 2024

Details Here. IPO Fundraising In 2023 Drops 17% to Rs 49,434 Crore

<p>According to Prime Database, 57 Indian firms raised a total of Rs 49,434 crore via mainboard IPOs in 2023, a 17% decrease from the Rs 59,302 crore raised by 40 IPOs in 2022. Except for the massive LIC IPO, which was released in 2022, IPO mobilization did, however, rise by 28% over the previous year.</p>
<p><img decoding=”async” class=”alignnone wp-image-337357″ src=”https://www.theindiaprint.com/wp-content/uploads/2024/01/theindiaprint.com-details-here-ipo-fundraising-in-2023-drops-17-to-rs-49434-crore-1700846880-3633-11-750×563.jpg” alt=”theindiaprint.com details here ipo fundraising in 2023 drops 17 to rs 49434 crore 1700846880 3633 11″ width=”1355″ height=”1016″ title=”Details Here. IPO Fundraising In 2023 Drops 17% to Rs 49,434 Crore 3″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2024/01/theindiaprint.com-details-here-ipo-fundraising-in-2023-drops-17-to-rs-49434-crore-1700846880-3633-11-750×563.jpg 750w, https://www.theindiaprint.com/wp-content/uploads/2024/01/theindiaprint.com-details-here-ipo-fundraising-in-2023-drops-17-to-rs-49434-crore-1700846880-3633-11-1024×768.jpg 1024w, https://www.theindiaprint.com/wp-content/uploads/2024/01/theindiaprint.com-details-here-ipo-fundraising-in-2023-drops-17-to-rs-49434-crore-1700846880-3633-11-768×576.jpg 768w, https://www.theindiaprint.com/wp-content/uploads/2024/01/theindiaprint.com-details-here-ipo-fundraising-in-2023-drops-17-to-rs-49434-crore-1700846880-3633-11-150×113.jpg 150w, https://www.theindiaprint.com/wp-content/uploads/2024/01/theindiaprint.com-details-here-ipo-fundraising-in-2023-drops-17-to-rs-49434-crore-1700846880-3633-11.jpg 1200w” sizes=”(max-width: 1355px) 100vw, 1355px” /></p>
<p>The managing director of PRIME Database Group, Pranav Haldea, said that total public equity financing climbed by 59% from Rs 90,886 crore in 2022 to Rs 1,44,283 crore in 2023.</p>
<p>Mankind Pharma had the biggest IPO in 2023, raising Rs 4,326 crore. JSW Infrastructure (Rs 2,800 crore) and Tata Technologies (Rs 3,043 crore) came next. On the other hand, Plaza Wires raised Rs 71 crore in its IPO, while Udayshivakumar Infra raised merely Rs 66 crore. Compared to the Rs 1,483 crore in 2022 and the Rs 1,884 crore in 2021, the average transaction size dropped dramatically to Rs 867 crore.</p>
<p>In only four months of the year, 40 out of the 57 IPOs occurred (September: 14, December: 11, November: 8, and August: 7).</p>
<p>“While we witnessed firms from numerous industries hitting the IPO market in 2023,” Haldea said, “BFSI was one significant area which had a restricted representation, with companies from this industry raising only Rs 6,190 crore (or 13 percent) (in compared to 46 percent in 2022). There were only two New Age Technology Companies (NATC): Yatra and Mamaearth.</p>
<p>PrimeDatabase.com reports that the public’s reaction was outstanding overall. Nine of the 57 IPOs were oversubscribed by more than three times, while 41 of the IPOs had a massive response of more than ten times (of which 16 received more than fifty times). One to three times as many people pre-ordered the remaining seven initial public offerings.</p>
<p>Retail investors’ reactions also significantly increased as compared to 2022. Compared to 5.66 lakh in 2022, the average number of applications from the retail sector rose to 13.21 lakh. Tata Technologies got 52.11 lakh applications from the retail sector, followed by DOMS Industries (41.30 lakhs) and INOX India (37.34 lakhs).</p>
<p>Again demonstrating a far greater degree of interest from retail during the time, the number of shares applied for by retail by value (Rs 1,49,988 crore) was 203% more than the entire IPO mobilization (compared to being 22% lower in 2022). However, the whole amount allotted to retail was Rs 13,749 crore, or 28% of the total amount raised for the IPO (a little less than 29% in 2022).</p>
<p>Haldea claims that excellent listing performance helped to significantly boost IPO response. Compared to 11% in 2022, the average listing gain (based on the closing price on the listing day) climbed to 29%. Forty of the 57 IPOs had returns more than ten percent.</p>
<p>Tata Technologies yielded an astounding 163% return, with Ideaforge coming in second at 93% and Utkarsh Small Finance Bank third at 92%. With an average return of 46%, 53 of the 57 initial public offerings are now trading above the issue price, or the closing price on January 1, 2024.</p>
<p>Out of the 57 IPOs that were listed on the market, 21 of them had a previous PE/VC investor that sold IPO shares. Such PE/VC investors made offers for sale totaling Rs 10,968 crore, which made up 22% of the IPO proceeds. A further 31% of the IPO proceeds came from private promoter offers for sale valued at Rs 15,196 crore.</p>
<p>Conversely, the entire amount of new capital generated via initial public offerings (IPOs) in 2023 was Rs 20,662 crore, or 42% of the total, which was the largest share percentage in 7 years. Capital enhancement/working capital accounted for almost 34% of the total amount obtained via fresh capital, with debt retirement coming in second at 22%, expansion/new project/plant & machinery at 15%, general corporate purpose at 11%, and issue expenses at 9%.</p>
<p>Together, anchor investors contributed 34% of the total funds raised during the public offering. As anchor investors, domestic mutual funds were somewhat more prevalent than FPIs, accounting for 14% of the issue amount compared to 13% for FPIs.</p>
<p>Collectively, Anchors Investors and other Qualified Institutional Buyers contributed 57% of the total amount raised via the public offering. Overall, FPIs subscribed to 23% of the issuance amount as anchors and QIB, which is higher than Mutual Funds’ 17% share.</p>
<p>87 firms filed their offer documents for clearance with SEBI in 2023 (compared to 89 in 2022). In contrast, 40 firms seeking to raise almost Rs 70,000 crore allowed their permission to expire in 2023, three companies seeking to raise Rs 3,550 crore withdrew their offer documents, and Sebi returned the offer documents of six more companies seeking to raise Rs 10,800 crore.</p>
<p><strong>Prognosis for 2024:</strong> The pipeline is still robust. Three of the 63 firms seeking to fund around Rs 16,000 crore are NATCs. Currently, 27 companies seeking to raise Rs 28,500 crore have received clearance from SEBI, while another 36 companies seeking to raise approximately Rs 40,500 crore are awaiting approval.</p>
<p>According to Haldea, there will be a number of initial public offerings (IPOs) in the next months before there is a hiatus due to the general elections.</p>
<p><strong>SME IPOs:</strong> In 2023, there was a significant surge in activity in this area, with 182 SME IPOs raising a total of Rs 4,681 crore, which is 150% more than the Rs 1,875 crore raised by 109 IPOs in 2022. With an IPO of Rs 99.99 crore, Spectrum Talent Management was the biggest SME.</p>
<p><strong>OFS (SE):</strong> Offers for Sale via stock exchanges (OFS), which are used to dilute promoters’ ownership, showed a sharp rise in 2023, rising from Rs 11,270 crore in 2022 to Rs 19,300 crore. This information is sourced from primedatabase.com. Of this, Rs 12,016 crore, or 62% of the total, came from the government’s disposal.</p>
<p>Coal India has the most OFS, at Rs 4,179 crore. Thirteen percent of the public stock markets’ mobilization for the year came from OFS. Additionally, in 2023, the Data Infrastructure Trust raised Rs 2,071 crore via the first-ever OFS by an InvIT or ReIT.</p>
<p>QIPs: In 2023, 45 firms raised a total of Rs 54,350 crore via QIPs, a 363 percent increase over the Rs 11,743 crore raised in 2022. Bajaj Finance raised the most money via QIPs, totaling Rs 8,800 crore, or 16 percent of the total amount raised.</p>
<p>Financial services and engineering firms made up the majority of QIPs, accounting for 76% (or Rs 41,248 crore) of the total. Furthermore, there was one QIP of Rs 2,305 crore from a ReIT of Brookfield India Real Estate Trust and one QIP of Rs 669 crore from an InvIT of India Grid Trust.</p>
<p><strong>InvITs/ReITs:</strong> From barely Rs 1,166 crore in 2022 to Rs 11,474 crore (3 issues), the total money raised via InvITs and ReITs increased significantly.</p>
<p><strong>Fresh Capital:</strong> Of the Rs 1,44,283 crore total equity raised, Rs 93,831 crore (65%) was fresh capital, up from 42% the previous year. The remaining Rs 50,453 crore were put up for sale.</p>

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