Raining IPOs: 2021 might even see report fundraising of over Rs 1 lakh crore

WITH THE IPO momentum holding robust, calendar 12 months 2021 is about to witness report fund elevating by preliminary public choices.
As on date, India Inc has raised over Rs 42,000 crore although 28 IPOs in seven months until date. If the variety of firms which have filed their points with SEBI or have proven intent to listing is any indication, this might simply cross Rs 1 lakh crore by December ought to the secondary market preserve its tempo.
Besides firms in conventional companies, the bumper itemizing of Zomato is about to set off a bunch of IPOs from different new-age firms together with Paytm, PhonePe, MobiKwik, Grofers, PolicyBazaar, Flipkart Internet, Delhivery amongst others which have proven their intention to listing this 12 months.
Such hectic fund elevating by IPOs was final witnessed in 2017 when firms raised Rs 67,147 crore by 36 IPOs. This 12 months, India Inc has already raised over Rs 42,000 crore although 28 IPOs. Data compiled by Prime Database reveals that 34 extra firms have already filed provide paperwork with Sebi, and are estimated to lift over Rs 71,000 crore by IPOs.
Further, 54 firms have introduced their intention to faucet the first market this 12 months, and simply 21 of them are estimated to lift over Rs 70,000 crore. These don’t embrace state-owned Life Insurance Corporation, which might increase round Rs 50,000 crore or extra relying on its estimated valuation of wherever between Rs 10 lakh crore and Rs 15 lakh crore.
Pranav Haldea, Managing Director, Prime Database, stated it’s vital for markets to stay bullish for offers to shut. “Even if the companies have Sebi approval, they will launch the issue only if the market is in bullish territory. In 2013, we did a study which showed that companies holding Sebi approval for IPOs worth Rs 75,000 crore allowed these to lapse when the markets turned bearish. So, while the pipeline is strong, bullishness in the market will be key for their conclusion,” stated Haldea.
Despite issues of a 3rd Covid-19 wave, stretched valuations and inflation, the market has proven urge for food for IPOs. ‘Seize the opportunity’ appears to be the axiom guiding retail contributors. “What is significant is banks and financial institutions have, of late, shown equal if not more interest than retail participants in primary issues. They have nearly doubled their investments in IPOs reaching four-year highs and we are only over half way through the year,” stated Nirai Shah, Head of Equity Research, Samco Securities.

The pleasure doesn’t finish right here; pension regulator PFRDA is contemplating allowing pension funds to broaden their funding spectrum to put money into eligible IPOs and comparable main points with sure predefined standards. “This unequivocally shows the IPO party is far from being over, given our economy is flushed with liquidity,” Shah stated.
While the Zomato IPO confirmed indicators of investor maturity and urge for food for brand spanking new age firms, Sebi chairman Ajay Tyagi not too long ago stated the filings and public choices mirror the maturity of the market to simply accept the enterprise mannequin of recent age tech firms, which aren’t amenable to valuation by typical metrics of profitability.
“Along with the robust growth, it is heartening to note that our markets are entering a new era with several new age tech companies preferring to list domestically. Our markets offer as attractive a fund-raising proposition as any overseas market,” Tyagi stated on the NISM capital market convention final week.
Successful IPOs of such firms are prone to entice extra funds in home markets, thus creating a brand new ecosystem of entrepreneurs and buyers, Tyagi stated.
After Zomato, the subsequent mega unicorn itemizing is prone to be One97 Communications, the mother or father agency of Paytm, a number one digital ecosystem for customers and retailers, which not too long ago filed the draft purple herring prospectus with the regulator SEBI for a Rs 16,600 crore IPO. This could possibly be one of many largest IPOs in recent times.

The firm’s income has been rising strongly, whereas losses have been coming down. It introduced a lack of Rs 1,701 crore in FY’21, decrease than Rs 2,942 crore in FY’20 and Rs 4,230 crore in FY’19.
LIC, which is making ready the groundwork for the IPO, is about to hit the capital market within the fourth quarter of FY’22 and will increase between Rs 55,000 and 80,000 crore.
As for the general useful resource mobilisation by capital markets, firms raised Rs 10.12 lakh crore in FY21 regardless of this being a pandemic-affected 12 months, surpassing earlier 12 months’s figures of Rs 9.96 lakh crore.