IPOs’ mop up highest in 9 years

The first half of the current fiscal April-September 2016-17, saw the highest mobilisation from IPOs at Rs 17,283 crore, the highest amount raised in the last 9 years.

The last high was in 2007-08 at Rs 21,244 crore, according to Pranav Haldea, managing director of PRIME, the leading database on the primary capital market.

Significantly of the 56 IPOs 41 were by SME IPOs who mobilised a modest Rs 358 crore compared to the 15 main board IPOs that mopped up Rs 16,924 crore representing 98 per cent of the total amount.

The average deal size for the main board IPOs was a high Rs 1,128 crore.

“We are now starting to see even larger size IPOs hitting the market. On an overall basis too, the pipeline looks promising. At present, 16 companies planning to raise Rs 5,745 crore are holding Sebi approval and another 5 companies intending to raise Rs 6,810 crore have filed with Sebi and are awaiting approval” said Mr Haldea.

Significantly, the bulk of the money raised, namely, Rs 17,298 crore will go to government, promoters, venture funds and other investors and not to the company as money was raised through offers for sale where the proceeds go to the sellers.

So only 19 per cent of the total amount raised in the first half (or Rs 4,019 crore) was through fresh capital, which typically goes into creation of productive assets.

Anchor investors, collectively subscribed to 30 per cent of the total public issue amount of the 15 main board IPOs while domestic institutional investors subscribed to 15 per cent as anchor investors.

FIIs also subscribed to 15 per cent of the main board IPOs.

ICICI Prudential Life Insurance was the largest main board IPO while the largest SME IPO was that of Radhika Jeweltech.

In terms of the method of offering, all 15 of the main board IPOs, amd 3 SME IPOs were through the bookbuilding route while the balance 38 SME IPOs were through the fixed price method.

The anchor investors of the 15 main board IPOs collectively subscribed to 30 per cent of the total public issue amount.