 "Fundraising via IPOs tops Rs 10,000 cr")
With the secondary market on a roll, fund-raising via the initial public offering (IPO) route, too, has hit top gear with companies raising nearly Rs 11,000 crore in the first seven months of 2016 (calendar year).
According to data provided by PRIME Database, 14 companies have already raised Rs 9,830 crore in the current year till July. With two more companies - Dilip Buildcon and S P Apparels - collectively raising around Rs 1,000 crore, the total fund mobilisation tally has hit Rs 10,830 crore thus far in CY16 till August 4, 2016.
The amount raised by the 16 companies so far during the current year has seen a 100 per cent jump compared to the same period in 2015, when a total of nine companies had collectively raised Rs 4,399 crore through IPOs between January 2015 and August 3, 2015. In CY15, 21 companies had raised a total of Rs 13,614 crore via this route.
“There is a general feel-good factor about the markets and this led to companies making use of the opportunity. Good quality issues have even given a decent return on listing. That has been the underlying factor as far as retail and high networth individuals (HNIs) are concerned. Pricing of a lot of IPOs has become appropriate, which means there is room for appreciation for investors. A general feel-good factor will fuel further rise. I think a lot more companies will tap the primary market for funds going ahead,” says Kamlaesh Rao, chief executive officer, Kotak Securities.
After the presentation of the Union Budget earlier this year when the overall market sentiment improved, the Nifty 50 index has rallied 23 per cent, while S&P BSE Sensex has gained 21 per cent during the period. Given the overall positive sentiment, 12 companies have tapped the primary market via the IPO route and raised Rs 9,500 crore since then.
“From a secondary market perspective, there may be some issues from specific sectors that are doing well, but from an IPO perspective, the issues need to be fairly priced so that there is reasonable upside from where it gets listed. Given this, there is enough appetite from the retail investors and HNIs for such issues,” says Rao.
Of the remaining, while Ujjivan Financial Services has doubled, Quess Corp, Infibeam Incorporation, Equitas Holdings, Advanced Enzyme Technologies and Parag Milk Foods have rallied 50-90 per cent compared to their respective issue price.
Analysts expect the IPO pipeline to remain robust going ahead. Some even see new economy and e-commerce players / sectors like websites, insurance and stock exchanges tapping the primary market. A reasonably priced issue will find takers, they suggest.
“Some of the new economy stocks / companies such as BharatMatromony.com could take the IPO route to raise funds. Insurance and stock exchanges are the other sectors / players that could tap the IPO market going ahead. There is no doubt there will be quality issues going ahead from the newer generation of businesses. There will be a good opportunity for them to service the investor via this route as well; and these issues will find takers,” explains Deven Choksey, managing director and chief executive officer, K R Choksey Shares and Securities.
According to data provided by PRIME Database, 14 companies have already raised Rs 9,830 crore in the current year till July. With two more companies - Dilip Buildcon and S P Apparels - collectively raising around Rs 1,000 crore, the total fund mobilisation tally has hit Rs 10,830 crore thus far in CY16 till August 4, 2016.
The amount raised by the 16 companies so far during the current year has seen a 100 per cent jump compared to the same period in 2015, when a total of nine companies had collectively raised Rs 4,399 crore through IPOs between January 2015 and August 3, 2015. In CY15, 21 companies had raised a total of Rs 13,614 crore via this route.
“There is a general feel-good factor about the markets and this led to companies making use of the opportunity. Good quality issues have even given a decent return on listing. That has been the underlying factor as far as retail and high networth individuals (HNIs) are concerned. Pricing of a lot of IPOs has become appropriate, which means there is room for appreciation for investors. A general feel-good factor will fuel further rise. I think a lot more companies will tap the primary market for funds going ahead,” says Kamlaesh Rao, chief executive officer, Kotak Securities.
After the presentation of the Union Budget earlier this year when the overall market sentiment improved, the Nifty 50 index has rallied 23 per cent, while S&P BSE Sensex has gained 21 per cent during the period. Given the overall positive sentiment, 12 companies have tapped the primary market via the IPO route and raised Rs 9,500 crore since then.
“From a secondary market perspective, there may be some issues from specific sectors that are doing well, but from an IPO perspective, the issues need to be fairly priced so that there is reasonable upside from where it gets listed. Given this, there is enough appetite from the retail investors and HNIs for such issues,” says Rao.
Of the remaining, while Ujjivan Financial Services has doubled, Quess Corp, Infibeam Incorporation, Equitas Holdings, Advanced Enzyme Technologies and Parag Milk Foods have rallied 50-90 per cent compared to their respective issue price.
Analysts expect the IPO pipeline to remain robust going ahead. Some even see new economy and e-commerce players / sectors like websites, insurance and stock exchanges tapping the primary market. A reasonably priced issue will find takers, they suggest.
“Some of the new economy stocks / companies such as BharatMatromony.com could take the IPO route to raise funds. Insurance and stock exchanges are the other sectors / players that could tap the IPO market going ahead. There is no doubt there will be quality issues going ahead from the newer generation of businesses. There will be a good opportunity for them to service the investor via this route as well; and these issues will find takers,” explains Deven Choksey, managing director and chief executive officer, K R Choksey Shares and Securities.