NEW DELHI: Amid high volatility and weakness in the capital market, fewer private companies decided to go public in the financial year 2022-23. A total of 37 Indian companies raised Rs 52,116 crore through main board initial public offerings (IPOs) in the financial year 2022-23, less than half of the Rs 1,11,547 crore (all-time high) raised by 53 IPOs in 2021-22, according to data issued by Prime Database.
If not for state-backed LIC (Life Insurance Corporation of India), funds raised in the primary market would have been far lower. According to Pranav Haldea, managing director, PRIME Database Group, Rs 20,557 crore or a huge 39 % of the amount raised in 2022-23 was by LIC alone, without which the IPO fundraising would have been just Rs 31,559 crore.
Despite the big slump, the amount raised in FY23 is still the third highest ever in terms of IPO fundraise. According to Prime Database, the pipeline remains strong for FY 2023-24 as 54 companies proposing to raise Rs 76,189 crore are presently holding SEBI approval and another 19 companies looking to raise about Rs 32,940 crore are awaiting SEBI approval.
Haldea said 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 foreign portfolio investors (FPIs),” added Haldea.
IPO response in FY23 was also muted on account of moderate listing performance. Average listing gain fell to 9.74%, in comparison to 32.59% in 2021-22 and 35.68% in 2020-21. Of the 36 IPOs, only 16 gave a return of over 10%. FY23 saw 68 companies filing their offer document with SEBI for approval (in comparison to 144 in 2021-22) including the first ‘pre-filing’ case of Tata Play in December 2022.
