The current calendar year -- 2021 -- is expected to set a new record in terms of fund raising through initial public offers (IPOs) with the cumulative amount expected to touch Rs 1 lakh crore for the first time ever.
The previous high was registered in the year 2017 when 36 companies raised a total of Rs 67,147.44 crore.
According to data from Prime Database, the current calendar year has already seen 28 companies launching their IPOs in the first seven months with the cumulative amount pegged at Rs 42,015.21 crore.
Further, more than 25 companies have already received the regulatory approval to launch their IPOs that are worth nearly Rs 36,000 crore in total. Once a company receives the final approval from SEBI, it can launch its IPO within 12 months. If in case, it is unable to do so, then it has to again seek an approval from SEBI.
The list of companies with a valid approval from SEBI includes a few big-ticket offerings as well with as many as 13 firms looking to raise an amount in excess of Rs 1,000 crore each. Bajaj Energy is eyeing a public issue worth Rs 5,450 crore while Nirma Group entity Nuvoco Vistas Corp plans to raise Rs 5,000 crore from the stock market.
Companies like Cartrade Tech (Carwale), Utkarsh Small Finance Bank, Puranik Builders, Jana Small Finance Bank and Samhi Hotels are also looking to raise an amount in excess of Rs 1,000 crore each, as per data from Prime Database.
Market participants are of the view that with the IPO pipeline looking quite robust, if the stock market sentiments remain bullish as was the case in the first half of the year, then the current year would end as a record year in terms of fundraising.
The unique highlight this year is the entry of companies from the new-age sectors like fintech and online segment, they add.
While companies from a wide array of sectors are looking to tap the markets this year, online majors like Paytm, Mobikwik, Nykaa and Policybazaar have added an interesting twist to the overall fund-raising ecosystem since it’s a completely new sector that has come to the stock market.
Last month, online food delivery major Zomato made a strong debut on the bourses after its IPO got subscribed more than 38 times. The stock is currently trading around Rs 138 levels – significantly higher than its issue price of Rs 76.
The listing of Zomato was keenly followed as it was expected to set a precedent for all the online and digital majors that are looking to go public later this year.
While most of the IPO-bound online majors have commanded huge valuations in the private funding space, they are mostly loss-making as of now and hence there is a lot of uncertainty in terms of how stock market investors would look at such entities.
Incidentally, the Securities and Exchange Board of India (SEBI) allows listing of loss-making companies on the domestic stock exchanges, but such entities have to allocate a higher portion of the shares -- 75 per cent instead of 50 per cent -- to institutional investors during an IPO.
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