IPO Market 2021: Fundraising hits record Rs 1 lakh crore mark as 63 issues hit Street

NEW DELHI: Fundraising by India Inc via initial public offer (IPO) crossed the Rs 1 lakh crore mark in 2021 in a first for any calendar year. Data showed a total of 63 Indian corporates raised an all-time high of Rs 1,18,704 crore through mainboard IPOs in 2021. Including the SME IPOs, the fund mobilisation stood at Rs 1,19,431 crore.

This was in comparison to a total of Rs 73,003 crore garnered by IPOs in the last three years.

"This was nearly 4.5 times Rs 26,613 crore raised through 15 IPOs in 2020 and almost double of the previous best year 2017 in which Rs 68,827 crore was raised. IPOs from new-age loss-making technology startups, strong retail participation and huge listing gains were the key highlights," according to Pranav Haldea, Managing Director at PRIME Database Group.


The IPO pipeline continues to remain strong with 35 companies holding Sebi approval to raise roughly Rs 50,000 crore and another 33 companies awaiting regulator go-ahead to raise about Rs 60,000 crore. This excludes the much anticipated mega IPO of LIC, which is expected to be launched in this financial year.

"Inflationary concerns resulting in rate hikes can be expected, which shall reduce the amount of liquidity available. How Omicron variant plays out shall also have an impact on the secondary market and consequently the primary market," Haldea said.

For 2021, the average IPO deal size was as high as Rs 1,884 crore. The year saw India's largest-ever IPO worth Rs 18,300 crore by One 97 Communications sail through.

Out of the IPOs, 36 received mega responses of more than 10 times. Six of them even received more than 100 times subscription. Eight IPOs were subscribed by 3 times or more. The balance of 15 IPOs were subscribed between 1 time and 3 times.

The average number of applications from retail was 14.36 lakh compared with 12.77 lakh in 2020 and 4.05 lakh in 2019. The highest number of applications from retail in 2021 was received by Glenmark Life Sciences (33.95 lakhs) followed by Devyani International (32.67 lakhs) and Latent View (31.87 lakhs), PRIME Database said in a note.

The amount of shares applied for by retail was a huge 135 per cent of the IPO mobilisation (156 per cent in 2020). However, the total allocation to retail was Rs 24,292 crore, which was just 20 per cent of the total IPO mobilisation. This was down from 32 per cent in 2020.

"The success of IPOs was further buoyed by strong listing performance. Of the 58 IPOs which have got listed thus far, 34 gave a return of over 10 per cent. Sigachi Industries gave a stupendous return of 270 per cent followed by Paras Defence (185 per cent) and Latent View (148 per cent)," Haldea said.

Forty of the 58 IPOs are trading above the issue price. The average listing gain for those IPOs was 32 per cent compared with 44 per cent in 2020 and 19 per cent in 2019.

Besides, 25 out of the 63 IPOs that hit the market had a prior PE/VC investment. Offers for sale by such PE/VC investors stood at Rs 24,106 crore and accounted for 20 per cent of the total IPO amount.
Offers for sale (OFS) by promoters at Rs 31,704 crore accounted for a further 27 per cent of the IPO amount. The amount of fresh capital raised in IPOs in 2021 was high at Rs 43,324 crore and greater than the last 8 years combined.

"Anchor investors collectively subscribed to 39 per cent of the total public issue amount. FPIs played a dominant role as anchor investors, with their subscription amounting to 24 per cent of the amount followed by MFs at 11 per cent. Qualified Institutional Buyers (including Anchors Investors) as a whole subscribed to 69 per cent of the total public issue amount (data for 59$ companies for which QIB and anchor investors data is available as of now). FPIs, on an overall basis as anchors and QIB, subscribed to 30 per cent of the issue amount followed by MFs at 16 per cent.

The year 2021 also saw a record number of filings with SEBI. As many as 115 companies filed their offer document with SEBI for approval. According to Haldea, to put this in context, 2019 and 2020 cumulatively had a total of just 50 filings.