Almost 1.8 million lakh rupees were raised during the year through a combination of initial public offerings (IPO), qualified institutional placements (QIP), offers for sale (OFS) and follow-up public offers (FPO), showed the data published by Prime Database. The year figure is higher than the Rs 1.6 lakh crore raised in 2017 and more than double the amount of Rs 82,241 crore for 2019.
According to Pranav Haldea, MD, Main database groupContrary to the discouragement experienced by the pandemic, 15 mainboard IPOs hit the market. These collectively raised just over Rs 26,600 crore, more than double the Rs 12,362 crore raised through 16 IPOs in 2019. The strong retail participation in IPOs, huge listing gains, and the highest amount made through QIP and InvIT / ReIT were the other key highlights of the year, Haldea said.
Leading commercial bankers said fundraising for the year could be split into two distinct parts. First through August, when companies mostly took the secondary supply route. Then several IPOs hit the market since September, starting with Happiest Minds Technologies. Between March and August, only one IPO, for Rossari Biotech, was successfully closed.
Shortly after the pandemic began, swift actions by governments and central banks to inject a record amount of liquidity at ultra-low interest rates gave investors the confidence to buy risky assets, including stocks. “Capital markets recovered faster than expected after the outbreak of the pandemic. Leading companies such as Reliance Industries, HDFC, ICICI Bank, Kotak Bank and Axis Bank, among others, were at the forefront in capturing large follow-up stocks, ”said V Jayasankar, Senior Executive Director and Head of Capital Markets at shares, Kotak Mahindra Capital said.
Top industry executives also said that the current trend of companies raising money through IPOs will continue in 2021. “A combination of good liquidity, issues from several quality companies with strong management records and good business models make the IPO for 2021 strong, “said Jayasankar.” Promoters, large shareholders, and private equity investors also monetized their holdings through large block sales and OFS. IPO launches gained momentum from August. Investors benefited significantly from the strong price gains, ending a large equity fundraiser for the year. ”
On the other hand, during the initial months of the pandemic, companies also recognized the uncertainty that was coming and “moved quickly to obtain defensive capital with different objectives (capital deleveraging, insurance capital, trust capital, opportunistic capital) to deal with short-term uncertainty, ”said Ravi Kapoor, director of corporate and investment banking at Citi India. “Investors, driven by healthy liquidity and attractive valuations relative to the long-term outlook, have been very supportive of raising capital by high-quality companies, which are likely to create significant opportunities from this crisis “.
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