High liquidity and robust interest from investors helped companies raise nearly Rs 25,000 crore through initial share-sales this year so far and 2021 is expected to be equally strong for the IPO market, experts said. Adding to the depth of the IPO market, companies from diverse sectors like pharma, telecommunication, IT and financial services have made their way to the IPO space during the period under review.
According to an analysis of data available with the stock exchanges, 12 initial public offerings (IPOs) in 2020 so far raised around Rs 25,000 crore, significantly higher than Rs 12,362 crore mopped up through 16 initial share sales in the entire 2019. Prior to that, 24 companies had floated their IPOs in 2018 that raised Rs 30,959 crore. In 2020 so far, close to Rs 25,000 crore has already been raised through IPOs and the figure could rise further as Burger King's Rs 810-crore initial share-sale is scheduled to open on December 2.
Vinod Nair, head of research at Geojit Financial Services, attributed higher fundraising in this year compared to 2019 to the high interest of corporates and retail investors for the primary market despite the huge contraction in the economy. At the same time, companies opted for the IPO route to build war-chest during the uncertainties and to strengthen their balance sheet, he added. The capital market activities saw a big bounce-back since May with several large secondary market offerings hitting the market.
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