A total of 37 companies looking to raise nearly Rs 52,060 crore let their approval lapse in FY23; a dozen companies looking to raise Rs 10,386 crore withdrew their offer document while Sebi returned the offer document of a further nine companies looking to raise about Rs 20,330 crore, PRIME Database said in its latest note.
Overall, the financial year FY23 saw 68 companies filing their offer document with the market regulator Sebi for approval, which was far lower a number when compared with 144 in FY22. The filing this year included the first ‘pre-filing’ case of Tata Play in December 2022.
FY24 pipeline
The IPO pipeline still remains strong, with 54 companies proposing to raise a huge Rs 76,189 crore are presently holding Sebi approval.
Another 19 companies looking to raise about Rs 32,940 crore are awaiting Sebi approval. Out of these 73 companies, four new age technology companies are looking to raise roughly Rs 8,100 crore, PRIME Database suggested.
“With weakness still prevailing in the secondary market, because of a combination of domestic and foreign factors, IPO activity is likely to remain muted for the first couple of quarters. We may see some smaller sized IPOs. However, it will be a while before we see larger sized deals, especially in light of lack of sustained interest from FPIs,” said Pranav Haldea, Managing Director at PRIME Database Group.
FY23 IPO performance review
Fundraising via initial public offers (IPO) more than halved to Rs 52,116 crore in FY23 from a record high of Rs 1,11,547 crore in FY22, with LIC alone accounting for 39 per cent of total funds raised by corporates this year.
A total of 37 main board IPOs hit the market in FY23 against 53 IPOs in FY22. “As many as 25 out of the 37 IPOs came in just 3 months of the year (May, November and December), which shows the volatile conditions prevalent through most of the year which are not conducive for IPO activity,” Haldea said.
LIC’s was the largest Indian IPO ever. It was followed by Delhivery (Rs 5,235 crore) and Global Health (Rs 2,206 crore).
“Rs 20,557 crore or a huge 39 per cent of the amount raised in 2022-23 was by LIC alone, without which the IPO fundraising would have been just Rs 31,559 crore. To be sure though, the amount raised in 2022-23 is still the third highest ever in terms of IPO fund raise,” said Pranav Haldea, Managing Director at PRIME Database Group.
The average listing gain, based on closing price on listing date, fell to 9.74 per cent, in comparison to 32.59 per cent in FY22 and 35.68 per cent in FY21. Of the 36 IPOs which have got listed thus far, 16 gave a return of over 10 per cent. DCX Systems gave a stupendous return of 49 per cent followed Harsha Engineers (47 per cent) and Electronics Mart (43 per cent). 21 of the 36 IPOs are trading above the issue price.
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