Companies raise Rs 843 bn via IPOs in FY18, a three-fold jump: Report

Indian companies garnered Rs 843.57 billion through initial share sales in 2017-18, registering a nearly three-fold jump compared to the preceding fiscal, says a report.

According to the study by PRIME Database, the amount raised by firms through the initial public offer (IPO) route stood at Rs 290.50 million  during 2016-17.

"2017-18 was the best year ever for the IPO market by far, the previous high being in 2007-08 when Rs 413.23 billion was raised, less than half of the amount raised in 2017-18," said Pranav Haldea, Managing Director, PRIME Database.

While there were 45 main-board IPOs during 2017-18 collectively raising Rs 821.09 billion, the preceding fiscal saw 25 of them together garnering Rs 282.25 billion.

As per the report, the largest initial share sale was from state-owned General Insurance Corporation of India for Rs 112.57 billion and the average deal size stood at Rs 18.25 billion.

Among the main-board IPOs, the issue of Salasar Techno Engineering received the best response with a subscription of 270 times, followed by Astron Paper & Board Mill at 241 times and Apollo Micro Systems at 176 times.

During 2017-18, there were 155 SME IPOs raising Rs 22.47 billion compared to 80 in the previous fiscal garnering Rs 825 crore.

The largest SME IPO in 2017-18 was from East India Securities (worth Rs Rs 880 million), the report said.

"2018-19 is likely to see more volatility in the secondary market which shall affect fund raising plans of companies as well.

"While there are 12 companies holding Sebi approval wanting to raise over Rs 103.95 million and another 18 companies wanting to raise about Rs 292.82 million awaiting Sebi approval, as we have seen in the past, this pipeline may quickly vanish if the volatility and negative sentiment continues," Haldea added.