76 per cent increase in funds raised in public equity markets in 2015: PRIME Database

Year 2015 saw Rs 68,608 crore being raised through public equity markets, a 76 per cent rise over the  Rs 39,067 crore of 2014, according to data released by PRIME Database. Of course, it fell short of the highest recorded fund raising, Rs 97,746 crore in 2010.

According to Pranav Haldea, Managing Director, PRIME database, a major revival was witnessed in the IPO market after four disappointing years. Despite turbulent secondary markets, 21 IPOs came to the market collectively raising Rs 13,862 crore in 2015 as opposed to Rs 1,468 crore in 2014. Year 2010 saw the highest-ever mobilisation through IPOs at Rs 37,535 crore. The largest IPO for 2015 was from Interglobe Aviation for Rs 3,017 crore. The average deal size was Rs 648 crore.

Read More

A notable feature of the year was that several companies that hit the market had a prior private equity/venture capital (PE/VC) investment. This was true for 11 out of the 21 IPOs. Offers for sale by such PE/VC investors at Rs 1,937 crore accounted for 14 per cent of the total IPO amount. Out of the 21 IPOs, 19 companies had anchor investors, which collectively subscribed to 30 per cent of the total public issue amount.

Domestic institutional investors played a significant role as anchor investors, with their subscription amounting to 13 per cent of the amount, compared to 16 per cent from FIIs. As far as retail investors are concerned, the year witnessed a good response from them. The highest number of applications was received by Alkem Laboratories at 606,000 followed by Dr. Lal Pathlabs (553,000), VRL Logistics (539,000), Inox Wind (399,000), Syngene International (320,000), S.H. Kelkar (218,000) and Navkar Corp. (206,000).

Offers for Sale through Stock Exchanges (OFS) accounted for as much as 52 per cent of the total year's amount. The largest OFS was of Coal India in January (Rs 22,558 crore) followed by Indian Oil in August (Rs 9,396 crore).

Listed companies continued to raise funds from institutional investors through the QIP route, with 32 QIPs mobilising Rs 19,182 crore. This, however, was a huge fall from the Rs 31,684 crore raised in the previous year. The largest QIP of 2015 was from IndusInd Bank raising Rs 4,328 crore.

Of the total amount of Rs 68,608 crore, the amount raised through fresh capital was only Rs 25,964 crore; the remaining Rs 42,644 crore being offers for sale.

A big disappointment for the primary market has again been the lack of divestments by the government. While a good start was made with over Rs 35,000 crore being raised in the first eight months, the balance four months of the calendar year did not see even a single divestment hitting the market.

Haldea expects 2016 to be even more promising with 20 companies holding SEBI approval and wanting to raise Rs 7,315 crore and another 11 companies wanting to raise Rs 5,445 crore, awaiting SEBI approval, at the beginning of the year.