Thursday, March 28th, 2024

Indifference of investors over IPO, companies got 50% less funding


Photo: File IPO

Share Market The brunt of the continuing volatility has hit the IPO market hard. Due to the indifference of investors, there was a huge reduction in the funding received by companies through IPOs. The amount raised through initial public offerings (IPOs) declined by more than half in the current financial year to Rs 52,116 crore as compared to 2021-22. At the same time, in the last financial year, Rs 1,11,547 crore was raised from the IPO, which is the highest figure so far. According to prime database only 37 companies got listed on stock exchanges in 2022-23. This is far less than the 53 IPOs that came in 2021-22.

LIC’s IPO saved its face

Prime Database Managing Director Praveen Haldia said that in the current financial year, 39 percent of the total amount raised i.e. Rs 20,557 crore was raised by LIC (Life Insurance Corporation of India) alone. If it is removed, only Rs 31,559 crore could have been collected through IPO this year. Despite all this, the amount raised through IPO in the financial year 2022-23 is the third highest amount. Overall, funds raised through public equity also declined by 56 per cent to Rs 76,076 crore from Rs 1,73,728 crore in 2021-22. While Rs 54,344 crore was raised through IPOs (including issues by small and medium enterprises), the amount raised through the capital market stood at Rs 85,021 crore. Of this, Rs 11,231 crore was raised through Offer for Sale, Rs 9,335 crore through Qualified Institutional Placement (QIP)/InvIT (Infrastructure Investment Trust)/REIT (Real Estate Investment Trust) and Rs 1,166 crore. That is, Rs 76,076 crore was raised as equity fund. A total of Rs 8,944 crore was raised through public bonds.

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The lowest IPO in the last nine years in the fourth quarter

In all, Rs 85,021 crore was raised through IPO and bonds. As per prime database, out of total 37 issuances, 25 came in only three months (May, November and December). At the same time, in the fourth quarter, the lowest number of issues came in the last nine years.

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