Sixty-three Indian companies hit a record Rs 1.18 lakh crore thanks to the IPOs of the motherboard during the 2021 calendar.
This was nearly 4.5 times the Rs crore raised by 15 IPOs in 2020 and almost double the previous best of 2017, in which Rs 68,827 crore was raised.
Key highlights were the IPOs of loss-making tech startups, strong retail participation and huge listing gains, according to Pranav Haldea, Managing Director of Prime Database Group.
Overall public fundraising broke the Rs 2 lakh crore to Rs 2.02 lakh crore in the 2021 timeline, which was higher than the previous highest amount of lakh 1.76 crore of Rs the previous year.
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The overall response from the public has been very good. Of the 59 IPOs for which data is available to date, 36 IPOs have received mega-responses more than 10 times (including 6 IPOs more than 100 times) while 8 IPOs have been oversubscribed more than 3 times. The remaining 15 IPOs were oversubscribed between 1 and 3 times.
The year was also marked by a tremendous response from retail investors. The average number of retail applications was 14.36 lakh, compared to 12.77 lakh in 2020 and 4.05 lakh in 2019. The highest number of retail applications in 2021 was received by Glenmark Life Sciences (33.95 lakhs) followed by Devyani International (32.67 lakhs) and the latent view (31.87 lakhs).
The number of shares requested by the retail sector represented 135% of the mobilization of IPOs (156% in 2020). However, the total retail allocation was Rs 24,292 crore, which was only 20% of the total IPO mobilization (up from 32% in 2020).
According to Haldea, the success of the IPOs was supported by a strong listing performance. Of the 58 IPOs that have been listed to date, 34 have yielded more than 10 percent (based on the closing price on the listing date). Sigachi Industries gave an extraordinary return of 270%, followed by Paras Defense (185%) and Latent View (148%), 40 of the 58 IPOs are trading above the issue price (closing price on December 22, 2021) . The average SEO gain was 32%, compared to 44% in 2020 and 19% in 2019.
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In total, 25 of the 63 IPOs that were launched on the market had a prior investment in PE / VC. These PE / VC investors’ offers to sell at Rs 24,106 crore represented 20% of the total IPO amount. Offers to sell by the promoters at Rs 31,704 crore represented an additional 27% of the IPO amount. On the other hand, the amount of fresh capital raised on IPOs in 2021 was a very high Rs 43.324 crore, which was higher than the past 8 years combined.
The lead investors collectively subscribed to 39 percent of the total amount of the public offering. REITs played a dominant role as anchor investors, with subscription amounting to 24% of the amount, followed by FMs at 11%. Qualified Institutional Buyers (including Anchor Investors) as a whole have subscribed to 69% of the total public issue amount (data for $ 59 companies for which QIB and Anchor Investor data is available now). REITs, collectively as Anchors and QIB, subscribed 30 percent of the issue’s proceeds followed by FMs at 16 percent.
The year 2021 also saw a record number of filings with SEBI. No less than 115 companies have filed their offer document with SEBI for approval. According to Haldea, to put that into context, 2019 and 2020 had only accumulated 50 deposits in total.
Following the record number of filings, the IPO pipeline continues to remain strong with 35 companies holding SEBI approval offering to raise approximately Rs 50,000 crore and 33 other companies awaiting SEBI approval to raise approximately Rs 60,000 crore. This, of course, rules out LIC’s highly anticipated mega IPO which is expected to launch during this fiscal year.
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