Fund raising through Initial Public Offerings (IPOs) on Indian bourses saw a record nine year high in the first quarter (April-June) of financial year 2017, reported Prime Database. The primary market witnessed 19 companies grace the exchanges collectively raising funds to the tune of Rs. 5,855 crore.
While the highest-ever for the April-June quarter was nine years back in FY2008 when IPOs grossed a total of Rs. 13,083 crore, FY2016 witnessed a modest Rs. 2,280 crore of fund raising from five main companies. FY2017 witnessed six main companies raise Rs. 5,728 crore.
Prime Database managing director Pranav Haldea told the Mint that the growth in funds was despite a shaky secondary market. However, he added that the trend in all probability will continue for the remaining three quarters of the fiscal.
With more IPO filings to flow in over the year, there are already 19 companies geared with capital market regulator's approval for a listing and another 5 awaiting an approval. Both looking forward to raise Rs.7,705 crore and Rs. 3,230 crore, respectively.
Reuters noted that IPOs scheduled for the second half (July to Dec) of the fiscal might bring even bigger bounty than the first half (Jan to June). Citing banking sources it said the latter half of the year could see over $6 billion in deals, while the first six months amounted a total of $1.04 billion, which was 80 percent higher than previous year.
Incidentally, the average deal size in the June quarter of 2017 fiscal was also a high of Rs. 955 crore. The largest was Equitas Holdings that listed for Rs. 2,177 crore, while the other four main IPOs included Quess Corp., Thyrocare Technologies, Mahanagar Gas and Ujjivan Financial Services.
IPO Trends
Prime Database noted that a unique feature of the June quarter was that most of the 19 companies that were listed had private equity or venture capital investments in them. Three of the six main IPOs provided an exit opportunity through offer for sale of their shares. The report highlighted that such PE or VC exits amounted to Rs. 2,292 crore or 40 percent of total IPO amount.
Incidentally, all the six main IPOs too had anchor investors who held nearly one third of the total subscription amount. Amongst them 21 percent of the anchor book was held by domestic institutional investors and another 12 percent by foreign institutional investors.
Mint highlighted that retail investors too actively invested huge amounts which was indicated by the number of applications received and number of times each of these main companies' issues were subscribed.
The offers to watch out in the second half of the year according to Reuters include the Vodafone's about $2.5 billion listing and ICICI Prudential Life Insurance Ltd's $1 billion offer.
