India's IPO fundraising drops by 32 pc

NEW DELHI: According to Prime Database, 14 Indian corporates raised Rs 35,456 crore through main board IPOs in the first half of 2022–23 (April to September). Compared to the Rs 51,979 crore raised through 25 IPOs over the same period in 2021–22, the amount raised is 32 percent less.

Pranav Haldea, Managing Director of PRIME Database Group, said that the IPO of LIC raised Rs 20,557 crore, or 58 percent of the total. Also, the total amount raised for public equity fell by 55 percent to Rs 41,919 crore from Rs 92,191 crore during the same time last year.

Life Insurance Corp. of India's IPO for Rs 20,557 crore was the greatest during this time period and the largest Indian IPO ever. Delhivery (Rs. 5,235 crore) and Rainbow Children's followed this (Rs 1,581 crore). Only one of the 14 initial public offerings (IPOs came from a new-age technology company (NATC), indicating a decline in IPO activity in this industry. The high Rs 2,533 crore average deal size was observed.

According to Prime Database, the general public's reaction was modest. Four of the 14 IPOs achieved a mega response of more than 10 times (including one that garnered more than 50 times) while the remaining three earned oversubscriptions of more than three times.

The rest 7 IPOs were oversubscribed between 1 to 3 times. The new HNI segment witnessed an encouraging response with 5 IPOs receiving a response of over 10 times.

The reaction from retail investors also moderated compared to 2021–2022 7.57 lakh applications were submitted on average from the retail sector, down from 15.56 lakh in 2021–22 and 12.49 lakh in 2020–21. LIC received the most retail applications (32.76 lakhs), followed by Harsha Engineers (23.86 lakhs), and Campus Activewear (17.27 lakhs).

In contrast to being 31 percent greater in 2021-22, Haldea claims that the amount of shares applied for by retail by value (Rs 23,880 crore) was 32 percent less than the total amount raised by the IPO over the time period. The entire amount allocated to retail was Rs 9,841 crore, or 28 percent of the total amount raised from the IPO (slightly up from 23 per cent in 2021-22).

Haldea said, the mediocre listing result further stifled IPO response. As measured by the closing price on the listing date, the average listing gain decreased to 12 percent from 32 percent in 2021–2022 and 42 percent in 2020–2021.
Six of the 14 IPOs produced returns of more than 10 percent. Dreamfolks came in third with 42 percent, followed by Syrma SGS (41 percent), and Harsha Engineers (47 percent). (42 per cent). Over the issue price, 11 of the 14 IPOs are trading (closing price of 26th September, 2022).

There were just four past PE/VC investors who sold shares in the IPOs out of the 14 IPOs that were listed on the market. Only 9 percent of the total IPO amount was represented by offers for sale from these PE/VC investors, which were valued at Rs 3,349 crore. An additional 6 percent of the IPO's proceeds came through promoter offers for sale at a price of Rs 2,206 crore. On the other hand, Rs 8,641 crore in new capital was raised through IPOs in 2022–2023
41 firms submitted their offer documents to SEBI for clearance during the first half of the current financial year 2022–2023 compared to 87 companies during the same period previous year.

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