Fund raise via IPO more than halves to Rs 52,116 cr in FY23 from FY22

The total amount raised through initial public offerings (IPOs) more than halved to Rs 52,116 crore in FY23 from an all-time high collection of Rs 1,11,547 crore in the previous fiscal, according to an analysis.

According to Prime Database, just 37 companies hit the main board listing process in FY23, much lower than 53 IPOs in FY22.

Pranav Haldea, managing director of Prime Database Group, said Rs 20,557 crore which is 39 per cent of the total amount raised in FY23 was by LIC alone, without which the IPO fundraising would have been just Rs 31,559 crore in the year. Yet, FY23 is still the third highest in terms of IPO fund-raise, he said.

Overall public equity fundraising also dropped by 56 per cent to Rs 76,076 crore in the reporting year from Rs 1,73,728 crore in FY22.

While IPOs were worth Rs 54,344 crore (including SME issues) in the year, total fund raising through the capital markets stood at Rs 85,021 crore, of which Rs 11,231 crore were from the OFS (offer for sale) route, Rs 9,335 crore were from QIPs/InvITs/REITs of which Rs 1,166 crore were from InvITs/REITs, taking the total equity fund raising to Rs 76,076 crore.

A total of Rs 8,944 crore were mobilised through public bonds, taking the total through IPOs and bonds to Rs 85,021 crore.

As against this, FY22 saw Rs 1,12,512 being raised from IPOs, Rs 4,314 crore via SME issue, Rs 14,530 crore through OFS, Rs 28,532 crore through QIPs/InvITs/REITs of which Rs 13,841 crore were from InvITs/REITs, taking the total equity capital mop-up to Rs 1,73,728 crore. The year also saw Rs 11,710 crore being raised via public bonds, adding which the total capital markets funding reached Rs 1,85,438 crore.

However, despite being hit by the Covid pandemic, FY21 was the best in overall capital markets performance with the total fund mobilisation from the market scaling to an all-time high of Rs 2,00,812 crore, boosted by a record Rs 28,440 crore through OFS, Rs 33,515 crore InvITs/REITs and Rs 15,029 crore of FPOs including from SMEs.

The main-board IPOs included the country's largest ever issue by Life Insurance Corporation, followed by Delhivery (Rs 5,235 crore) and Global Health (Rs 2,206 crore). The average deal size hit a high of Rs 1,409 crore.

As many as 25 of the 37 issues came in just three months of the year (May, November and December) and the fourth quarter was the lowest in the last nine years.

Only 2 of the 37 issues (Delhivery & Tracxn) were from new-age technology companies compared to five such companies raising Rs 41,733 crore in FY22, pointing towards the slowdown in IPOs from this sector.

Overall public response was also moderate with only 11 issues receiving good response of over 10 times subscription and two of them got more than 50 times, while 7 issues were oversubscribed by more than 3 times. The balance 18 issues were oversubscribed 1-3 times.

In comparison to FY22, the response of retail investors also moderated with the average retail applications dropping to just 5.64 lakh from Rs 13.32 lakh in FY22 and from 12.73 lakh in FY21. LIC got the highest retail applications (32.76 lakh) followed by Harsha Engineers (23.86 lakh) and Campus Activewear (17.27 lakh).

Only 14 of the 37 IPOs had a prior PE/VC investor who sold shares in the IPO.

Offers for sale by such PE/VC investors stood at Rs 7,902 crore or 15 per cent of the total IPO amount.

Offers for sale by private promoters stood at Rs 6,373 crore or 12 per cent, while offers for sale by the government accounted for 40 per cent. This has had the fresh capital raised in these IPOs at just Rs 14,034 crore.

According to Haldea, the IPO pipeline remains strong with 54 companies proposing to raise a huge Rs 76,189 crore holding Sebi approval and 19 more, looking to raise about Rs 32,940 crore, are awaiting the regulator's nod.