Advertisement

Home / Business / Public offers disappoint

Public offers disappoint

Fund raising through initial public offerings saw a huge drop of 81%
Pranav Haldea, managing director of PRIME Database, said 2018-19 saw fundraising through IPOs drop from Rs 83,767 crore in the previous financial year to only Rs 16,294 crore.
Pranav Haldea, managing director of PRIME Database, said 2018-19 saw fundraising through IPOs drop from Rs 83,767 crore in the previous financial year to only Rs 16,294 crore.
(Shutterstock)

Our Special Correspondent   |   Mumbai   |   Published 30.03.19, 07:03 PM

The benchmark index may be a few hundred points away from its record high, but there is disappointing news coming from the public equity markets as 2018-19 draws to a close.

According to Prime Database Group, mobilisation from this market (IPOs, FPO, OFS, QIP) witnessed a drop of 68 per cent during the year when it came in at Rs 56,440 crore compared with Rs 1,75,680 crore in the preceding year. Fund raising through initial public offerings saw a huge drop of 81 per cent.

Advertisement

Pranav Haldea, managing director of PRIME Database, said 2018-19 saw fundraising through IPOs drop from Rs 83,767 crore in the previous financial year to only Rs 16,294 crore. There were 14 main-board IPOs that hit the market and raised Rs 14,674 crore compared with the previous year’s number of 45 for Rs 81,553 crore, he said. While the largest IPO was from HDFC Asset Management for Rs 2,800 crore, the average deal size was a high Rs 1,048 crore.

Of the 14 IPOs, nine companies had anchor investors, which collectively subscribed to 26 per cent of the total public issue amount. The domestic institutional investors played a significant role as anchor investors, with their subscription amounting to 13 per cent of the amount, same as the 13 per cent from FPIs.

The overall response from the public to the mainboard IPOs was moderate. While two initial offers received strong response of more than 10 times (RITES at 67 times followed by HDFC Asset Management at 60 times), four other IPOs were subscribed by more than three times and the balance seven were subscribed between one to three times only.

Retail investors also largely gave a cold shoulder to the offerings with the highest number of applications being received by HDFC Asset Management at 23.30 lakh followed by RITES (12.96 lakh) and Ircon (8.62 lakh). In qualified institutional placement, only 13 companies mobilised Rs 10,489 crore — down 83 per cent from Rs 62,520 crore raised in the previous year. 



Advertisement
Advertisement
Advertisement
 
 
 
Copyright © 2020 The Telegraph. All rights reserved.