While 59 companies raised ₹59,332 crore through initial public offerings (IPOs) in 2022, many were forced to let their approvals granted by the market regulator — the Securities and Exchange Board of India (Sebi) — lapse due to volatility, a report by Business Standard stated.
It is important to note that an IPO should be launched within one year after Sebi’s final observations.
As per the report, in 2022, 28 such approvals lapsed, which could have together raised another ₹38,828 crore. The offer documents which expired in December could alone have raised ₹10,350 crore, added the BS report.
While some, whose approvals lapsed, are planning to re-file their draft red herring prospectus (DRHP), others who failed to launch IPO are looking at alternative ways of raising capital, the report said, citing industry players.
Go First, One Mobikwik Systems, ESAF Small Finance Bank, VLCC Healthcare, Sterlite Power Transmission, and Keventer Agro are some of the companies that let their DRHP lapse, the report stated.
DRHP is a preliminary prospectus filed ahead of an IPO which has important details including the number of shares being offered, financial results, risk factors, among others.
Although the Indian market has outperformed in peers this year, there was sharp volatility which is to be blamed for a lot of companies failing to launch IPOs, said the report, citing bankers.
In an uncertain environment, you cannot launch a large IPO. Deals take time to hit the markets. It takes a minimum of seven to nine months,” Dharmesh Mehta, managing director (MD) and chief executive officer, DAM Capital Advisors, was quoted as saying.
However, bankers say the next year is likely to be “tumultuous” for IPOs, added the report.