‘Fund raise via IPO to hit a new high of ₹3 lakh cr next fiscal’
Investment bankers are expecting the fundraising through the initial public offering and qualified institutional placement to touch ₹3 lakh crore next fiscal given the economic growth potential and buoyant investor sentiment.
The expected fund mobilised will be much higher than the previous high of ₹1.88 lakh crore recorded in 2021.
As many as 90 companies have either raised or announced fundraising of ₹1.62 lakh crore so far this year, 2.2 times higher than last year’s ₹49,436 crore.
About 34 companies have already secured SEBI approval to hit the market to raise cumulatively about ₹41,460 crore this year. Additionally, 55 firms intending to raise ₹98,600 core are awaiting regulatory clearance. A company gets a one-year window to launch the IPO after getting SEBI approval.
Mahavir Lunawat, Chairman of the Association of Investment Bankers of India told businessline that fund mobilisation through IPO has been on the rise for the last two financial years and will continue to rise next fiscal as well. The total amount of capital formation via IPOs and QIPs is projected to exceed ₹3 lakh crore in FY26, he added.
About 851 IPOs have entered the market in the last 6 years (from FY20 to date), but in the next two fiscal, 1,000 companies will tap the capital market with IPO, Lunawat added.
Gone are the days when Indian corporates used to take pride in raising funds abroad, now a host of foreign companies are lining up to raise funds in India, added Lunawat.
Incidentally, South Korean chaebol LG Electronics India has filed papers with SEBI to offload a 15 per cent stake through IPO while Samsung India is also firming up plans for listing in the domestic market.
This apart, subsidiaries of banks and large corporates including HDFC Bank, Hero MotoCorp, Reliance Industries, Manappuram Finance, Muthoot Finance, Canara Bank and Greaves Cotton plan to enter the market.
The country’s largest public company by market capitalisation, Mukesh Ambani-led Reliance Industries plans to list Reliance Jio and Reliance Retail in the next fiscal.
Reliance has already raised $25 billion collectively for its digital, telecom and retail businesses from private equity majors KKR, General Atlantic and the Abu Dhabi Investment Authority, valuing both ventures at over $100 billion.
Regarding the high valuation of IPOs, Lunawat said the huge over-subscription in most of the issuances is an indication that the valuation has been reasonable though there may be some slippages in the SME IPOs.
On valuation of new age business, he said it has been a learning experience for the industry and the process will get sharpened as more of these businesses get listed on the exchange.
