IPO fund-mobilisation hits five-year high

Capital-raising by way of initial public offerings (IPO) so far in 2015 has climbed to its highest level in five years. Companies have raised nearly Rs 7,500 crore through 16 IPOs this year, over six times the amount raised last year. The recently-concluded Rs 1,100-crore IPO of Coffee Day Enterprises saw fund-raising for the year surpass that of 2011, when 37 companies had together raised nearly Rs 6,000 crore.

IPOs worth nearly Rs 4,000 crore, including that of InterGlobe Aviation, are likely to hit the market this month. Fund-raising through IPOs had slumped in the previous two years. IPO activity has seen traction only recently, with companies queuing up to market regulator Securities and Exchange Board of India (Sebi) with offer documents for IPOs.

Despite a rise in capital-raising, the amount raised so far this year is only a fraction of what India Inc had raised in 2010 through IPOs. In 2010, Rs 37,535 crore was raised by 64 companies.

 

Investment bankers say fund-raising through the IPO route this year will surpass Rs 10,000 crore. Many companies are expected to hit the market in the remaining two months of the year, but most deal sizes are small, they say.

"Though a general positive sentiment has prevailed, we are yet to see large IPOs hitting the market," says Pranav Haldea, managing director of Prime Database. Next week's Rs 3,200-crore InterGlobe Aviation IPO will be the biggest since December 2012.