The Economic Survey tabled in the Parliament on Monday highlighted the fact that the current financial year has been an exceptional year for the primary market as a record quantum of fund mobilisation was witnessed with companies across segments, especially start-ups and unicorns, tapping the public markets.
According to the Survey, initial public offers (IPOs) of 75 companies hit the market during April-November 2021 to raise a cumulative Rs 89,066 crore, which was much higher than the corresponding period of the previous fiscal when 29 firms raised a total of Rs 14,733 crore.
The money raised by IPOs has been greater than what has been raised in any year in last decade by a large margin, it stated.
“The year 2021-22 so far has been an exceptional year for the primary markets with a boom in fundraising through IPOs by many new age companies/ tech start-ups/ unicorns,” stated the Survey.
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“The exuberance associated with the listings manifested in huge oversubscriptions by retail, high net worth individuals (HNIs) and institutional investors and stellar listing gains have pushed more and more companies to tap the markets. The tremendous response by all categories of investors in IPOs of companies was reflective of not only the confidence in markets, but also that in corporate sector performance and prospects of the economy in the long run,” it added.
Incidentally, the current financial year has been the best-ever for the Indian capital markets in terms of fund raising through IPOs. Data from Prime Database, a primary market tracker, shows that a little over Rs 1 lakh crore (Rs 1 trillion) has been raised in the current fiscal till December.
This is the first time ever that more than Rs 1 lakh crore has been raised in any financial year by way of primary market issuances.
The Economic Survey, however, also noted that fund raising through other avenues like rights issue and qualified institutional placements (QIP) declined while quantum of money raised through preferential allotment rose in the period between April and November 2021.
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