Fund raising via equity issues jumps more than doubles in 2020

The devastating pandemic failed to dampen the primary and secondary capital market issuances with the year closing with the highest ever fund raising from the equity markets, that grew at 116 per cent to Rs 1.78 lakh crore in IPOs, OFS and other market issuances, according to a report.

Despite the entire 2020 being overshadowed by the pandemic, an all-time high fund raising through public equity markets at Rs 1,77,468 crore. This was 116 per cent higher than Rs 82,241 crore was raised in 2019, according to Pranav Haldea, managing director at Prime Database.

The previous highest amount raised in a calendar year was Rs 1,60,032 crore in 2017.

Strong retail participation in IPOs, huge listing gains and highest-ever amount raised through QIPs and InvITs/REITs were the key highlights of the year, he said.

While IPOs fetched Rs 26,770 crore, which was 40 per cent higher than collected in 2019, FPOs netted Rs 15,024 crore, followed by OFS (offer for sale) at Rs 21,458 crore and REITs/InvITs/QIPs at Rs 84,501 crore, shows the report.

Of the last category, REITs/InvITs constituted Rs 29,715 crore, totalling the entire equity capital raising at Rs 1,77,468 crore in the year.

Including Rs 7,485 crore bond issuance, the total capital raising stood at Rs 1,84,953 crore, according to the report.

As against this in 2019, the total IPO market was a paltry Rs 12,985 crore, and including Rs 18,637 crore of bond sales, the total equity capital raising was Rs 1,00,878 crore. In 2018, the IPO market was better at Rs 33,246, yet the total fund raising was only Rs 93,352 crore

But the best year for IPOs was 2017 when as much much as Rs 68,827 crore was collected through this route, taking the total Rs 1,60,032 crore.

According to Haldea, contrary to the despondency due to the pandemic, 15 main-board IPOs came to the market collectively raising Rs 26,611 crore. This was an increase of 115 per cent from the Rs 12,362 crore raised through 16 IPOs in 2019 and 24 issued raised Rs 30,959 crore in 2017 and 36 issuances mopped up Rs 67,147 crore in 206.

The largest IPO in 2020 was from SBI Cards for Rs 10,341 crore. Five of the 15 IPOs had a prior PE/VC investment.

Offers for sale by such PE/VC investors combined stood at Rs 8,026 crore accounted for 30 per cent of the total IPO amount. Offers for sale by promoters at Rs 7,880 crore accounted for a further 30 per cent of the IPO amount.

Of the 15 IPOs, 13 had anchor investors, which collectively subscribed to 29 per cent of the issue.