India Inc raised Rs 46,778 crore through the public equity offerings in the current financial year, 23 times higher than Rs 2,034 crore mopped up in the last fiscal, a study says.
According to an analysis by Prime Database, which tracks primary capital market, companies raised a whopping Rs 46,778 crore in 2009-10 through the public offerings dominated by the state-run firms, which raised Rs 30,942 crore or 66 per cent of the total amount.
The mobilisation in the year could have been higher but due to the continuing volatility in the secondary market and poor post-IPO performance of some companies in the early part of the fiscal, fund raising plan failed to breach the record level of Rs 52,219 crore raised in 2007-08.
Nevertheless, the financial year 2009-10 amount stands as the second-highest ever and is almost double of each of the preceding years of 2004-05, 2005-06 and 2006-07, as per Prime.
Interestingly, after several years, the mobilisation was almost equally shared by initial public offers (IPOs) and the follow-on public offers (FPOs), the study added.
Fund raised by public sector undertakings was the highest ever amount mobilised by them. The last time when the PSUs had raised the biggest amount was in the 2003-04 at Rs 16,563 crore, Prime Database Chairman and Managing Director Prithvi Haldea said in a statement.
Of the Rs 30,942 crore raised in current financial year, Rs 21,162 crore was through divestments and Rs 9,780 crore through fresh capital.
A total of six PSU companies entered the market in FY10, led by NMDC (Rs 9,791 crore) followed by NTPC (Rs 8,480 crore), NHPC (Rs 6,039 crore), REC (Rs 3,530 crore), Oil India (Rs 2,777 crore) and United Bank of India (Rs 325 crore).
According to Prime Database, after several years, the mobilisation was almost equally shared by IPOs and FPOs. A total of 39 IPOs collectively raised Rs 24,924 crore (53 per cent of the total amount) compared to Rs 2,034 crore via by 21 IPOs last fiscal.
Five companies raised Rs 21,854 crore through FPOs in the year 2009-10, which is just about to end. Last fiscal, there was not a single FPO.
The number of issues hitting the market recorded a huge 110 per cent increase, Haldea said.
The year 2009-10 witnessed 44 public issues, compared to 21 in the previous fiscal.
Significantly, in terms of method of offering, all issues of the year were through the book-building route, signifying a near-demise of the fixed price method. The year also saw the introduction of the French Auction system, which was used by NTPC and REC.
"Most IPOs of the year gave excellent returns on listing," the study said.
The power sector had the dominant share with 5 companies raising Rs 21,993 crore (47 per cent of total amount) followed by mining or minerals sector with one issue raising Rs 9,791 crore (21 per cent) and financial services or banking sector with two issues raising Rs 3,855 crore (8 per cent).
In addition to equity issues, the year also saw 3 public bonds issues, raising a total amount of Rs 2,250 crore, Prime study said.
