A total of 31 Indian corporates raised Rs 26,300 crore through mainboard IPOs in the first half of 2023-24, which was 26 per cent lower than the Rs 35,456 crore mobilised by 14 IPOs in the same period in 2022-23, according to data from primary market tracking firm Prime Database. However, excluding the mega LIC IPO which took place last year, IPO mobilisation increased by a huge 76 per cent from last year.
Pranav Haldea, managing director of Prime Database Group, said, “Overall public equity fundraising increased by 69 per cent to Rs 73,747 crore, compared with Rs 43,694 crore in the first half of 2022-23.”
Mainboard IPOs: The largest IPO in the first half of 2023-24 was from Mankind Pharma (Rs 4,326 crore), followed by JSW Infrastructure (Rs 2,800 crore) and RR Kabel (Rs 1,964 crore). At the other end, the smallest IPO was from Plaza Wires raising just Rs 67 crore. The average deal size was Rs 848 crore. As many as 21 out of the 31 IPOs came in just 2 months of August and September.
Haldea also said that while companies from multiple sectors tapped the IPO market in the last six months, one key sector which was missing was BFSI with just Rs 1,525 crore (or 6 per cent) being raised by companies from this sector (in comparison to 61 per cent in the same period last year).
Just 1 out of the 31 IPOs (Yatra) was from a new-age technology company (NATC) pointing towards a continuing slowdown in IPOs from this sector.
Prime Database said the overall response from the public was good. Of the 28 IPOs for which data is available presently, 19 IPOs received a mega response of more than 10 times (of which 9 IPOs more than 50 times), while 4 IPOs were oversubscribed by more than 3 times.
The balance 5 IPOs were oversubscribed between 1 to 3 times. The relatively new HNI segment (Rs 2-Rs 10 lakh) saw an encouraging response with 17 IPOs receiving a response of more than 10 times from this segment.
In comparison to the first half of 2022-23, the response of retail investors increased tremendously. The average number of applications from retail increased to 10.02 lakh, in comparison to 7.57 lakh in 2022-23. The highest number of applications from retail were received by Ideaforge (22.29 lakhs) followed by Aeroflex (21.62 lakhs) and SBFC Finance (20.19 lakhs).
The amount of shares applied for by retail by value (Rs 55,516 crore) was 118 per cent higher than the total IPO mobilisation (in comparison to being 33 per cent lower in 2022-23) showing a much higher level of enthusiasm from retail during the period. The total allocation to retail, however, was Rs 6,506 crore which was 26 per cent of the total IPO mobilisation (slightly down from 28 per cent in 2022-23).
According to Haldea, IPO response was further buoyed by strong listing performance. Average listing gain (based on closing price on listing date) increased to 29.44 per cent, in comparison to 11.56 per cent in the first half of 2022-23.
The amount of fresh capital raised in IPOs in the first half of 2023-24 stood at Rs 12,979 crore or 49 per cent of the total amount, the highest (in terms of per cent share) in 7 years.
Domestic mutual funds played a slightly more dominant role than FPIs as anchor investors with their subscription amounting to 15 per cent of the issue amount with FPIs at 14 per cent.
FPIs, on an overall basis, as anchors and QIB, subscribed to 26 per cent of the issue amount, more than mutual funds at 20 per cent.
Outlook for October-March FY24
Prime Database said the pipeline continues to remain strong. A total of 28 companies proposing to raise Rs 38,000 crore are presently holding Sebi approval, while another 41 companies looking to raise about Rs 44,000 crore are awaiting Sebi approval (Out of these 69 companies, 3 are NATCs which are looking to raise roughly Rs 12,000 crore).
Haldea said that notwithstanding the current volatility in the secondary market, the next 4-5 months are likely to see several IPOs being launched before a pause on account of the general elections.
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