Despite market volatility, corporate fundraising at record high in FY25

Public equity fundraising stood at Rs 3.71 trillion in FY25, marking a 92 per cent rise from Rs 1.9 trillion in FY24

Fundraising by Indian companies through equity and debt reached an all-time high in the financial year 2024-25 (FY25), according to data collated by primedatabase.com.

 

Fundraising through debt stood at ₹11.1 trillion in FY25, including contributions from InvITs (infrastructure investment trusts) and REITs (real estate investment trusts). Of this total, ₹11,04,331 crore was raised through private debt placements, while ₹8,044 crore was raised through the public bond issuances.

 

However, the public bond market issuances saw a decline, with 44 issues raising ₹8,044 crore in the current financial year compared with 48 issues raising ₹20,787 crore in the previous financial year. The largest public bond issue during this period was from Motilal Oswal Financial Services, which raised ₹1,000 crore.

 

In contrast, the amount raised through private debt placements reached ₹10.79 trillion, a 6 per cent increase from ₹10.20 trillion raised by 1,033 institutions and companies in the previous year. The highest mobilisation through private debt placements came from the National Bank for Agriculture and Rural Development (Nabard), which raised ₹72,388 crore, followed by REC with ₹ 57,826 crore and PFC with ₹50,077 crore. Additionally, 19 debt private placements from InvITs and REITs raised ₹25,585 crore.

 

Overall public equity fundraising stood at ₹3.71 trillion in FY25, a 92 per cent rise from ₹1.9 trillion in FY24. If rights issues of ₹16,167 crore (including InvITs/REITs) were to be added, the overall equity fundraising nearly touched ₹3.8 trillion in FY25.

 

Seventy-eight companies raised ₹1.62 trillion through main board initial public offerings (IPOs) in FY25, more than 2.5 times the ₹61,922 crore mobilised by 76 IPOs in the previous financial year.

 

The largest IPO in FY25 of ₹27,859 crore was from Hyundai Motor, followed by Swiggy (₹11,327 crore) and NTPC Green Energy (₹10,000 crore). The smallest IPO was from Kronox Lab Sciences, which raised ₹130 crore. The average deal size increased 2.5 times to ₹2,082 crore, up from ₹815 crore in the last financial year.

 

Fifty-six out of the 78 IPOs received a mega response of more than 10 times (of which 33 IPOs more than 50 times), while 7 IPOs were oversubscribed by more than 3 times. The remaining 15 IPOs were oversubscribed between 1 to 3 times.

 

The average number of retail applications rose to 21.33 lakh in 2024-25 compared to 13.15 lakh last year. The highest number of retail applications was received by Waaree Energies (70.13 lakhs), followed by Bajaj Housing Finance (58.66 lakhs) and KRN Heat Exchanger & Refrigeration (55.23 lakhs).

 

The total allocation to retail, however, was only ₹40,471 crore, 25 per cent of the total IPO mobilisation, down from 27 per cent last year. According to Pranav Haldea, managing director of PRIME Database group, IPO response was further buoyed by strong listing performance. The average listing gain increased slightly to 30 per cent compared to 29 per cent in FY24. Fifty-five of the 78 IPOs gave a return of over 10 per cent. Mamata Machine rose 159 per cent from its issue price on the listing day, followed by Bajaj Housing Finance (136 per cent) and KRN Heat Exchanger & Refrigeration (117 per cent).

 

Forty-six of the 78 IPOs continue to trade above the issue price. The average return of the 78 IPOs of FY25 has been 15 per cent, despite the market correction in the year's second half. The average absolute return from IPOs from 2019-20, 2020-21, 2021-22, 2022-23, and 2023-24 has been a respectable 300, 257, 71, 75, and 42 per cent, respectively.

 

According to Haldea, this bursts the myth that IPOs are "always overpriced" and do not provide long-term returns. The pipeline of issues continues to be robust, with 49 companies currently holding the Securities and Exchange Board of India (Sebi) approval proposing to raise ₹84,000 crore, while another 67 companies looking to raise about ₹1,02 trillion are awaiting the regulator's nod.