December is usually a quiet period for fundraising, as international investors take a break for the year-end holidays. However, this year has been exceptional for India Inc, with a bumper month of equity issuances worth ₹20,989 crore. This surpasses the previous record of ₹13,758 crore set in December 2017. The fundraising activities include initial public offerings (IPOs), qualified institutional placements (QIPs), and other avenues such as rights issues and offers for sale.
In December, eleven main board companies raised or announced raising ₹8,400 crore through IPOs, while five companies secured ₹11,400 crore through QIPs. For comparison, companies raised ₹11,247 crore from total equity issuances in December 2022. December 2021 and 2020 witnessed ₹10,238 crore and ₹9,155 crore being raised, respectively.
December 2023 has seen eight companies scheduling IPOs between December 20 and 28, coinciding with the period when foreign portfolio investors (FPIs) are on vacation. These companies have plans to raise ₹4,480 crore.
The robust performance of the equity fundraising activities can be attributed to significant funds flowing in from domestic investors. This has instilled confidence among issuers to launch equity fundraising as the year comes to a close. The current buoyancy of the secondary market, which is trading at all-time highs, has also resulted in high demand for equity issuances. Abhijit Tare, the chief executive of investment banking at Motilal Oswal Financial Services, highlighted that the favorable environment for raising fresh capital is created by the liquidity from domestic sources and the influence of domestic funds on the primary market this year.
In September 2023, Bank of India and Indian Bank raised ₹4,500 crore and ₹4,000 crore, respectively, through QIPs. Sterling & Wilson Renewable Energy secured ₹1,500 crore, while Titagarh Rail Systems and Jammu & Kashmir Bank raised ₹700 crore and ₹750 crore, respectively.
Ravi Sardana, an investment banker, emphasized that the influx of funds from domestic investors has given issuers confidence to launch IPOs at the year-end, a period when many overseas investors are likely to be on holiday. He also mentioned that the Securities and Exchange Board of India’s (SEBI) bold initiative to list IPOs within three days of closure has facilitated efficient fund management for investors.
On the IPO front, Dom Industries, India Shelter Finance Corporation, and Inox India collectively raised ₹3,859 crore this month. September 2023 stands out as the most successful month for IPOs, with 14 companies raising a total of ₹11,893 crore. In terms of monthly records, November 2021 holds the top position with a fundraising of ₹35,664 crore through IPOs, followed by May 2022 with ₹29,511 crore.
Regarding QIPs, August 2020 witnessed six companies raising ₹39,032 crore, while in June 2017, three companies secured ₹17,506 crore.
So far this month, foreign portfolio investors (FPIs) have invested ₹2,871 crore in the primary market and ₹40,357 crore in the secondary market. On the other hand, domestic institutional investors purchased shares worth a total of ₹3,182 crore in the month.
