IPOs raise record Rs 27,000 crore in April-September this year

NEW DELHI: Indian companies raised a record close to Rs 27,000 crore through
initial public offerings in the first half of the current fiscal and an impressive pipeline
is already in place for coming months.

"Besides, over a dozen firms, including New India Assurance Company, Reliance
Nippon Life Asset Management and HDFC Standard Life Insurance Company, have
lined up their IPOs to raise funds totalling Rs 35,000 crore in coming months,"
Dinesh Rohira, founder and CEO at 5nance.com

Adding to the depth of the IPO market, companies from diverse sectors like
insurance, healthcare, education, bank, cable TV and shipping have made their way
to the IPO space during the period under review.

According to the latest data compiled from stock exchanges, 19 companies garnered
over Rs 26,720 crore through their respective IPOs in April-September of the
ongoing financial year, much higher than Rs 16,535 crore raised by 15 firms in the
year-ago period.

Prior to that, companies had raised a record Rs 21,244 crore from initial public offers
(IPOs) in the first half of 2007-08.
Proceeds of the IPO were used to fund business expansion plans, pay debt, meet
working capital requirements and for other general corporate purposes.

"One of the big reasons why we are seeing so many IPOs hitting stock markets is
the uplift in investor sentiment, which is also reflected in the returns that the Nifty
gave in the first half of the year," Rohira added.

"Further, Sebi's proactive regulations and (Narendra) Modi-led government's pro-

business policies have helped both companies and investors shrug off fears and lap
up opportunities to become part of the India growth story," he noted.

Making a similar point, Bajaj Capital CEO Rahul Parikh said: "The underlying bullish
sentiment in the markets and consequent high demand from domestic investors
means that companies can get a good price for their issues. Also, there is a need to
deleverage balance sheets."

He added: "Time is also ripe for institutional investors like private equity to exit at a
good price as prevailing valuations in secondary markets are high."

Market watchdog Sebi has taken numerous steps that have encouraged companies
to sell shares. One key enabler is making Asba (Application Supported by Blocked
Amount) mandatory for all investors, including retail. Also, Sebi's proactive approach
to the market has calmed investors' nerves on frauds.
By taking the IPO route, the companies achieve benefits of listing as well as
enhance their brand name and provide liquidity to the existing shareholders.

Moreover, IPOs like Avenue Supermarts -- which runs retail chain D-mart -- and
CDSLBSE 0.00 % clocking more than 200 per cent returns since listing have
bolstered investors' faith to clock handsome gains.

The IPO chart in the first half of the current fiscal was led by SBI Life Insurance (Rs
8,400 crore), followed by ICICI Lombard General Insurance (5,700 crore), AU Small
Finance Bank (Rs 1,912 crore), Eris Lifesciences (Rs 1,741 crore), Cochin Shipyard
(Rs 1,468 crore) and Housing and Urban Development Corporation (Rs 1,224 crore).