According to marketmen, the pack is led by OYO which is said to be looking to mop up over Rs 8,300 crore and Go Digit Insurance
Mumbai:
After a record 31 initial share sales in the first half of this fiscal, the IPO pipeline looks strong with 28 firms eyeing to raise Rs 38,000 crore in the second half and another 41 awaiting Sebi’s nod to launch initial public offerings worth Rs 44,000 crore, a report said.
Fund raising through initial public offerings or IPOs fell 26 per cent to Rs 26,300 crore in the first half of the current fiscal, despite the number of issues more than doubling to 31, from 14 issues with the total mop-up of Rs 35,456 crore in the year-ago period, according to Primedatabase.
According to Pranav Haldea, managing director of Prime Database which is a leading database on the primary capital markets, of these 69 companies, three new-age technology firms are collectively planning to mop up Rs 12,000 crore.
According to marketmen, the pack is led by OYO which is said to be looking to mop up over Rs 8,300 crore and Go Digit Insurance.
As against this, the first half saw only one tech issue by Yatra which had raised Rs 775 crore in late September. The bumper issues in the previous fiscal were Paytm, Zomato and Nykaa.
According to Haldea, notwithstanding the present volatility in the secondary market, the next half is likely to see several IPOs being launched before a pause on account of the general elections.
According to the leading brokerage Angel One, the major upcoming IPOs include OYO, Tata Technologies, JNK India, Dom Industries, Apeejay Surrendra Park Hotels, Epack Durables, BLS E-Services, India Shelter Finance Corporation, Cello World, RK Swamy, Flair Writing Industries, Go Digit Insurance, and Credo Brands Marketing, among others.
The proposed Tata Technologies issue will be the first IPO from the Tata stable after 19 years — the last Bombay House company to go public was TCS in 2004.
Tata Technologies is an operating subsidiary of Tata Motors and offers high end technology solutions. Tata Motors is expected to hive off over 811 lakh shares in the IPO as part of the offer for sale. The IPO will be a 100 per cent offer for sale. Tata Technologies is a leading player in the automotive ER&D services. Its client roster includes 35 original equipment manufacturers and 12 new energy players.
Oravel Stays or OYO Rooms originally planned to mop up Rs 8,430 crore comprising Rs 7,000 crore of fresh issue and Rs 1,430 crore of offer for sale. However, it is expected to tone down the valuation and also the size of the issue.
According to Haldea, overall public equity fundraising increased 69 per cent to Rs 73,747 crore in H1 of FY24 from Rs 43,694 crore in the first half of FY23.
The largest issue in the first half was the Rs 4,326 crore Mankind Pharma OPO, followed by JSW Infrastructure (Rs 2,800 crore) and RR Kabel (Rs 1,964 crore). On the other hand, the smallest IPO was from Plaza Wires which rased just Rs 67 crore and the average size was Rs 848 crore. As many as 21 out of these 31 issues came in August and September.
QIP
Fundraising through the issuance of shares to qualified institutional investors has seen hectic activity in the first half of the current fiscal year (FY24), with 20 companies mobilising over Rs 18,400 crore, more than four-fold from the year-ago period, on positive investors’ sentiments.
Moreover, the robust trend of Qualified Institutional Placements (QIPs) in the first half of the fiscal year 2023-24 is expected to persist throughout the second half of the year too, Sanjay Moorjani, Research Analyst at SAMCO Securities, told PTI.
Prashant Rao, Director and Head of Equity Capital Markets, Anand Rathi Investment Banking, said that market and investor sentiments play an important role for these issuances. Till the time market sentiments are positive and investors are earning returns, listed companies would prefer to raise funds through QIP which allows them to have faster access to funds.
”We believe the second half of this year also to be positive for QIP issuances,” he added.
According to prime database.com, 20 companies collected Rs 18,443 crore through QIPs in the first half of 2023-24, which was way higher than Rs 4,022 crore raised in the same period last year.
QIP issuance was dominated by financial services and power generation companies as they accounted for 70 per cent or Rs 12,890 crore of the overall amount.
The largest QIP was from state-owned Union Bank which mopped up Rs 5,000 crore, accounting for 27 per cent of the total QIP amount. The bank raised the amount to augment its capital base.
In addition, there was one QIP of a REIT of Brookfield India Real Estate Trust that garnered Rs 2,305 crore during the period under review.
”The resurgence in fundraising activity through QIPs signifies a growing confidence among investors and businesses alike. As companies seek fresh capital, they are positioning themselves to seize new growth opportunities and expand their operations. This surge in the fundraising activity clearly shows that the private capex has started to revive,” SAMCO Securities’ Moorjani said.
Anand Rathi Investment Banking’s Rao attributed the primary reason for the increase in QIP fundraising to the market and investor sentiments that play an important role in their success. Unlike the first half of FY23, when market sentiments were relatively sluggish, the markets have done well and have remained positive through the first half of FY24.