In 2023, 57 Indian corporates collectively raised Rs 49,434 crore through main board initial public offerings (IPOs), marking a 17% decrease compared to the Rs 59,302 crore raised by 40 IPOs in 2022. However, when excluding the mega LIC IPO from 2022, IPO mobilization showed a significant 28% increase over the previous year.
Here are some key highlights:
– **Overall Equity Fundraising:** The total public equity fundraising surged by 59% to Rs 1,44,283 crore in 2023, up from Rs 90,886 crore in 2022.
– **Largest IPOs:** Mankind Pharma led the pack with the largest IPO in 2023, raising Rs 4,326 crore. This was followed by Tata Technologies (Rs 3,043 crore) and JSW Infrastructure (Rs 2,800 crore).
– **Smallest IPOs:** Udayshivakumar Infra and Plaza Wires had the smallest IPOs, raising Rs 66 crore and Rs 71 crore, respectively.
– **Average Deal Size:** The average deal size reduced significantly to Rs 867 crore, compared to Rs 1,483 crore in 2022 and Rs 1,884 crore in 2021.
– **Timing of IPOs:** A significant portion of the IPOs (40 out of 57) was concentrated in four months, with September leading at 14 IPOs, followed by December (11), November (8), and August (7).
– **Sectoral Trends:** The BFSI sector contributed only 13% of the total IPO mobilization, a notable decline from 46% in 2022. New age Technology Companies (NATC) were limited, with only 2 IPOs.
– **Investor Response:** Of the 57 IPOs, 41 received a mega response of more than 10 times, with 16 IPOs oversubscribed by more than 50 times. Retail investor participation increased significantly, with an average of 13.21 lakh applications, compared to 5.66 lakh in 2022.
– **Listing Performance:** Average listing gains increased to 29%, up from 11% in 2022. Out of the 57 IPOs, 40 provided a return of over 10%.
– **Investor Composition:** PE/VC investors and private promoters participated actively in IPOs, with offers for sale accounting for 53% of the total IPO amount. Fresh capital raised amounted to Rs 20,662 crore, the highest percentage share in seven years.
– **Fund Utilization:** 34% of the fresh capital raised was allocated for Capital Enhancement/Working Capital, followed by Retirement of Debt (22%) and Expansion/New Project/Plant & Machinery (15%).
– **Anchor Investors:** Anchor investors collectively subscribed to 34% of the total public issue amount, with domestic Mutual Funds playing a slightly more dominant role than Foreign Portfolio Investors (FPIs).
Looking ahead to 2024, there is a strong IPO pipeline, with 27 companies approved by SEBI to raise Rs 28,500 crore, and 36 companies awaiting regulatory approval to raise about Rs 40,500 crore. Pranav Haldea, Managing Director of PRIME Database Group, anticipates a flurry of IPO launches in the next couple of months before a potential pause due to general elections.
