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At Rs 26,500 crore, 2016's IPO kitty highest in 6 years
Writer Admin Date 2017-01-03 15:15

A combination of smart pricing, introduction of companies from newer sectors to stock market investors and the push by private equity investors to exit investments helped 27 companies together raise nearly Rs 26,500 crore through initial public offers (IPOs) in 2016. The total fund raised from IPOs during the past 12 months was nearly double the 2015's figure. Also, it was close to what was raised during the previous five years put together. Merchant bankers now expect the strong IPO trend to continue in 2017.

 

In addition to the nearly Rs 26,500 crore through IPOs on the main board of the stocks exchanges, 2016 also saw Rs 495 crore raised through the SME platform and another Rs 13,000 crore through offer for sales (OFS) by listed entities, data from Prime Database showed.

 

In comparison, in 2015, Rs 13,614 crore was raised through IPOs, Rs 260 crore through SME platforms and Rs 35,566 crore through the OFS channel, the data showed.

 

Merchant bankers pointed out that unlike in several IPOs in the past, the current breed of promoters is willing to leave something on the table for investors who are buying their shares in these offers. "Most of the offers were well-priced. So there was a lot of scope for retail investors to make money in these offers," said Dharmesh Mehta, MD, Axis Capital. "Also, investors accepted companies from newer sectors coming to the market," he said, which led to several of the IPOs being oversubscribed in high double digits.

 

Positive market sentiment and investors' bullishness about India's growth story also helped, said Ajay Saraf, ED, ICICI Securities. Exits by private equity investors also helped this strong surge in IPOs this year.

 

Looking ahead, Saraf believes market activity would increase further in 2017 across sectors, especially financials, logistics, infrastructure, technology, media and consumer. "Capital-raising requirements from corporates, private equity exits, broadly positive IPO returns and strong demand from domestic investors would be the main drivers of IPO activity next year," he said.

 

Merchant bankers said in 2017, based on the IPO pipeline, some of the companies that are expected to hit the markets include NSE, BSE, SBI Life, UTI Mutual Fund, SIS, Continental Warehousing and CDSL. Telecom major Vodafone is also contemplating to go public. In addition, a large number of SMEs and OFS are also expected to come to the market in the next 12 months, they said.

 

http://timesofindia.indiatimes.com/business/india-business/At-Rs-26500cr-2016s-IPO-kitty-highest-in-6-years/articleshow/56263733.cms