Despite multiple headwinds throughout the year, as many as 53 companies raised ₹1.15 lakh crore through initial public offerings (IPOs) in the financial year 2021-22 (FY22), which was the highest ever in a financial year.
Before this, the highest fundraising through IPOs was seen in FY18, when 45 firms raised ₹81,553 crore. Then in FY21, 30 firms raised ₹31,268 crore and before that in FY17, 25 firms raised ₹28,225 crore via IPOs.
|Financial Year||Funds Raised through IPOs ( ₹cr)||No of IPOs|
Despite the record-high fundraising in FY22, the last quarter of the financial year witnessed merely 6 IPOs mainly on the back of worsening geopolitical tensions between Russia and Ukraine and its resulting inflationary concerns. Further, the consistent selling by foreign outflows and poor performance of new-age startups like Paytm and Zomato also kept investors cautious as well as even led to delays of some upcoming issues.
The first quarter of the FY22 witnessed just 6 listings mainly due to the second wave of the pandemic, leading to a reassessment of the listing plans and volatility in the market. However, with the easing of restrictions in the second quarter, there was a renewed traction with 17 listings in the quarter and 12 in the third quarter, an earlier report by KPMG had noted.
The year also saw a record number of filings with SEBI with as many as 137 companies filing their offer documents with the regulator for approval.
FY22 witnessed the largest Indian IPO ever seen from One 97 Communications (Paytm) for ₹18,300 crore. Overall, four out of the top six IPOs were from new-age technology companies which together raised ₹38,734 crore. The average deal size stood at ₹2,143 crore, according to data released by Prime Database.
It added that, of the 50 IPOs which have been listed thus far, 30 gave a return of over 10 percent (based on the closing price on the listing date).
As per Pranav Haldea, Managing Director, PRIME Database Group, "IPO activity is likely to remain muted at least for the next few weeks due to high volatility in the secondary market, mainly because of the Russia-Ukraine imbroglio. Additionally, the overall liquidity, especially from FPIs, has also taken a hit following rate hikes from global central banks.”
The KPMG report also noted that the global geopolitical risks are making India a favourable destination for foreign investment with indications of stable returns. The long-term fundamentals of the Indian economy remain in place despite the persistent challenges presented by the pandemic.