Fund raising via equity market routes plummets 60% to Rs 637.44 bn in 2018

The largest IPO this year was from Bandhan Bank for Rs 44.73 billion

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Indian companies have raised Rs 637.44 billion through various equity market routes in 2018, a slump of 60 per cent from the all-time high of Rs 1.6 trillion garnered in the preceding year, according to data analytics major Prime Database.

Apart from equity, firms have also mopped up Rs 299.44 billion through public issuance of bonds during the year.

Out of the cumulative Rs 637.44 billion garnered through public equity markets in 2018, a large chunk or Rs 332.44 billion has been mopped up from initial public offers (IPOs).

Besides, qualified institutional placement (QIP) accounted for Rs 160.77 billion, offer-for-sale (OFS) through stock exchange mechanism got Rs 10,678 crore and Infrastructure investment trusts (InvITs) helped raise Rs 31.45 billion.

As per the report, 24 mainboard IPOs collectively raised Rs 30,959 crore. This was a decline from Rs 671.47 billion raised through 36 IPOs in 2017.

However, small and medium enterprise (SME) platform witnessed hectic activities in the IPO space, raising Rs 22.54 billion in 2018, much higher than Rs 16.79 billion collected last year.

According to Prime Database Managing Director Pranav Haldea, the overall response from the public to the mainboard IPOs in 2018 was good.

The largest IPO this year was from Bandhan Bank for Rs 44.73 billion.

Many IPOs received mega response including that of Apollo Micro Systems, which was subscribed by 176 times, followed by Amber Enterprises (115 times), RITES (67 times), HDFC Asset Management (60 times), Galaxy Surfactants (14 times) and Bandhan Bank (11 times).

Of the 24 IPOs which got listed, Apollo Micro Systems gave a return of 65 per cent followed by HDFC Asset Management (65 per cent), Amber Enterprises (44 per cent), Lemon Tree Hotels (28 per cent), Bandhan Bank (27 per cent) and 15 per cent each by RITES and Galaxy Surfactants.

However, given the correction in the markets in the second half of the year, 15 of the 24 IPOs are presently trading below the issue price.

Going into 2019, not too much action is expected in the first half of the year till the conclusion of the general elections, despite the fact that the IPO pipeline is huge, as 59 firms already have Sebi's approval for Rs 631.70 billion-IPO and another 19 companies looking to raise Rs 18,067 crore are awaiting the regulator's go-ahead, Haldea added.

The report said fund raising through OFS fell to Rs 106.78 billion in 2018 from Rs 180.94 billion last year. The largest OFS was that of Coal India in October this year (Rs 52.74 billion) followed by Larsen & Toubro Infotech (Rs 1,846 crore).

A total of 25 companies mobilised Rs 16,677 crore through QIPs. This was 73 per cent lower than Rs 61,148 crore raised in the previous year. The largest QIP of 2018 was from Idea Cellular that raised Rs 3,500 crore.