Proceeds from IPOs plunge 60% in 2019
It was a disappointing year in terms of funds raised via initial public offerings (IPOs). Only 16 companies raised Rs 12,362 crore in 2019, a fall of 60 per cent from 2018 when the Street mopped up Rs 30,959 crore.
Data released by Prime Database on Thursday showed the overall response from the public to IPOs during the year was good.
While seven IPOs received a mega response of being subscribed more than 10 times (IRCTC at 109 times followed by Ujjivan Small Finance Bank 100 times and CSB Bank at 48 times), one issue was subscribed over three times. The balance seven were oversubscribed between one and three times.
The decline in fund raising comes amid a slowdown in the economy with real GDP coming in at 4.5 per cent in the second quarter of this fiscal. Despite the good response received by some of the offerings, 47 firms looking to raise over Rs 51,000 crore allowed their Sebi approval to lapse.
Data for the past five years show that in 2017, there were 36 IPOs which raised Rs 67,147 crore, while 2016 saw 26 issues collecting Rs 26,494 crore. Similarly, Rs 13,614 crore was raised in 2015 through 15 issues. The most disappointing number was in 2014 when Rs 1,201 crore was mobilised from five IPOs.
However, driven by offer-for-sale and qualified institutional placements, the Street saw a 28 per cent growth in overall fund raising at Rs 81,174 crore in 2019 against Rs 63,651 crore in 2018 but this is 49 per cent lower than the all-time high of Rs 1,60,032 crore raised in 2017, Pranav Haldea, managing director at Prime Database Group, said.
The largest IPO in 2019 was from Sterling & Wilson Solar which raised Rs 2,850 crore, while the average issue size was Rs 773 crore.
Haldea added that only three of the 16 IPOs that hit the market had a prior PE/VC investment, a notable change from previous years.
On the listing front, the year was good with seven IPOs giving a return of over 10 per cent, based on the closing price on the listing date.
Then there was IRCTC which gave a strong return of 128 per cent, followed by CSB Bank (54 per cent), Ujjivan (51 per cent) and Indiamart Intermesh (34 per cent).