Business & Economy
Five-fold increase in amount raised through IPOs in H1 of 2015-16: Prime Database
New Delhi, October 13, 2015
The first half of current fiscal 2015-16 has ended with a mobilisation of Rs. 4,950 crore through initial public offers (IPOs), with another Rs. 12,916 crore raised through the Offer for Sale through Stock Exchange mechanism (OFS), according to Prime, a database on the primary capital market.
Mr. Pranav Haldea, Managing Director of Prime, said this represented a near five-time increase from the corresponding period of the preceding year in which only Rs. 1,017 crore was mobilised.
By number, the period witnessed 39 IPOs compared to 25 in the corresponding period of the preceding year. Of the 39, there were 12 main board IPOs mobilising Rs. 4,777 crore (or 97 per cent of the amount) with the balance 27 being SME IPOs mobilising Rs. 173 crore.
The largest main board IPOs were of UFO Moviez (Rs. 600 crore) and Navkar Corp. (Rs.600 crore) while the largest SME IPO was that of Amrapali Fincap (Rs. 40 crore).
According to Mr. Haldea, the high OFS amount is solely due to the Government disinvestment programme with Rs. 12,733 crore out of Rs. 12,916 crore (or 99 per cent) being raised in the OFS of REC (Rs. 1610 crore), PFC (Rs. 1673 crore), DCIL (Rs. 53 crore) and IOC (Rs. 9396 crore).
He said that it was extremely positive to see action on the divestment front in the first half of the fiscal, a period where traditionally small amounts have been raised by the Government in the last several years. This is the highest amount ever raised in the first half through Government disinvestment, the next highest being Rs. 4,035 crore raised in 2009-10.
In all, there were seven OFS (previous corresponding period 15), which mobilized Rs.12,916 crore (previous year Rs.2,593 crore). The largest OFS was of Rs. 9,396 crore (Indian Oil).
According to PRIME, only 16 per cent of the total amount raised in the first half (or Rs. 2,918 crore) was raised through fresh capital, which typically goes into creation of productive assets, while the remaining Rs. 14,949 crore was raised through offers for sale where the proceeds go to the sellers -- government, promoters, venture funds and other investors and not to the company.
In terms of the method of offering, all 12 of the main board IPOs, as per Prime, were through the bookbuilding route, with the remaining 27 SME issues through the fixed price method. The facility of anchor investors was used by 10 companies.
Mr. Haldea said that, even though a general positive sentiment has prevailed, the market was yet to see large IPOs.
"The pipeline though looks promising. At present, 19 companies planning to raise Rs. 11,545 crore are holding SEBI approval and another 17 companies intending to raise Rs. 6,795 crore have filed with SEBI and are awaiting approval," he added.