Fiscal Year 23 to set a new record in fundraising for IPO

2021 was an impressive year for the Indian primary markets, with the highest ever fundraising rate in a calendar year. And the momentum may continue into fiscal year 23.

According to a note from Prime Database, 54 companies are planning to raise a whopping 1.4 trillion rupees in the upcoming financial year, including their long-awaited initial public offering.

These 54 companies already have the approval of the Securities and Exchange Commission of India (Sebi), the market regulator, to raise the funds.

The note said another 43 companies are looking to raise around Rs 81,000 crore as SEBI’s approval is still pending.

The amount raised in FY22, according to Pranav Haldea, Managing Director, PRIME Database Group was more than 3.5 times the Rs 31,268 crore raised through 30 IPOs in 2020-2021. The previous best year was 2017-18 (FY 2018) when Rs.81,553 crore was raised.

According to Pranav Haldea, Managing Director of PRIME Database, IPOs from money-losing new-age tech startups, strong retail participation and listing gains were other highlights in 2021-22. But fundraising from public equity fell to 1.70 trillion rupees from 1.9 trillion rupees a year earlier.

The largest IPO of 2021-22, which was also the largest Indian IPO ever, was One 97 Communications (PayTM) for Rs 18,300 crore.

Other notable companies include Zomato, Star Health, PB Fintech, Sona BLW, and FSN E-Commerce, Nykaa’s parent company.

Retail investors have been a force to reckon with.

The Prime Database report said the average number of orders from the retail category was 14.05 lakh, compared to 12.73 lakh in 2020-21 and 6.88 lakh in 2019-20.

The largest number of applications from retail in 2021-22 were Glenmark Life Sciences, Devyani International, and Latent View.

Going forward, analysts expect the secondary market to remain volatile due to the geopolitical crisis between Russia and Ukraine. And they feel this will have ramifications for core market activity as well.

For example, G Chokkalingam, founder and chief investment officer at Equinomics Research, expects Sensex to remain in the 56,000 to 57,000 range until a solution to the Ukraine-Russia war is found.

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