IPO mart revs up in 3 yrs of Modi govt, garners Rs 45,000 cr

Strong liquidity, from mutual funds and foreign institutional investors, supported the IPO market

Three years since Narendra Modi was sworn in as prime minister, the mood in the primary market has improved. Fifty-seven Initial Public Offers of equity (IPOs) have hit the market in this period and collectively garnered about Rs 45,000 crore. In this period, the benchmark indices surged 24 per cent.

Of these offers, 16 had an issue size in excess of Rs1,000 crore. The biggest IPOs were of ICICI Prudential Life Insurance (Rs6,057 crore), Inter Globe Aviation (Rs 3,025 crore), PNB Housing (Rs3,000 crore) and Equitas Holdings (Rs2,177 crore).

Investment bankers say strong liquidity, particularly from mutual funds and foreign institutional investors, supported the IPO market.

Nineteen companies hit the market in 2015, with a total issue size of Rs13,000 crore. The year 2016 saw 26 companies coming to the market and collectively mop about Rs 27,000 crore, the best for IPOs in six years.

However, the bulk of the amount mobilised through IPOs in the past three years was via secondary exits; little was raised by companies as primary capital. Experts say primary fundraising will improve once there is sustained pick-up in the economy.

As many as 22 companies gained more than 20 per cent on listing day; 15 ended in the red. The highest listing-day gains were registered by Avenue Supermarts (114 per cent), Snowman Logistics (67.5 per cent), and Quess Corp (59 per cent). The biggest day-one losers were PNC Infratech (81 per cent), HealthCare Global Enterprises (22 per cent) and Quick Heal Technologies (21 per cent).

Nine stocks are now up more than 100 per cent over their issue price. The highest gainers are Sharda Cropchem (218 per cent), Wonderla Holidays (188 per cent) and Quess Corp (164 per cent). Eighteen are trading below their issue price, with UFO Moviez India (100 per cent), PNC Infratech (63 per cent), Inox Wind (58 per cent) and Adlabs Entertainment (58 per cent) the major losers.

Good post-listing performance for most IPOs attracted a lot of new investors towards the primary market, say experts. The last three years has seen several healthcare companies tap the market. These include Alkem Laboratories, Dr Lal Pathlabs, Thyrocare Technologies, Laurus Labs and Narayana Hrudayalaya. New-age entities such as Infibeam (e-commerce), Equitas (small payments bank), and Quess Corp and TeamLease Services (temporary staffing companies) also tapped the market.

The IPO pipeline continues to remain strong, with big-ticket issues such as of the National Stock Exchange and from government-owned general insurance companies waiting to hit the market.