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Companies raise Rs 18,803 crore through IPO in the March quarter

The IPO market continued to boom in the first quarter of calendar 2021 as 17 companies closed initial public offerings to raise Rs 18,800 crore, the highest since the same period in 2018.

This also one of the highest counts of mainboard IPOs in a single quarter.

The March quarter of 2018 saw 14 IPOs that raised an aggregate of Rs 19,275 crore. This quarter is also recognized for the start of a southward journey in the broader space following a stellar run of around 48 percent in BSE Midcap and 60 percent in BSE Smallcap indices in 2017.

The huge gush of global liquidity increased sentiment in the primary as well as secondary markets as FIIs poured in more than Rs 53,000 crore into Indian equities in March quarter of 2021, against the outflow of Rs 54,235 crore in the same quarter of last year, when the COVID-19 pandemic occurred.

“As seen in the past, liquidity tailwind had led to a mad rush of IPOs and other capital raising initiatives by companies. Given the availability of ample money at lower cost, we will continue to see higher public issuance in the coming financial year,” Poonam Tandon, CIO at IndiaFirst Life Insurance Company said.

The initial public offering is a method through which the company raises the required amount for its growth, working capital, etc., or gets listed on the market to provide an exit route or enables partial offloading of shares by existing shareholders.

The mood in the primary market was also heightened by bullish sentiment in the secondary market. The market remained to be at record highs till the middle of February following which it consolidated within a 1,000-1,200 range of Nifty. Overall, benchmark indices advanced about 3.5 percent through the quarter but the broader markets outpaced them with the BSE Midcap index gaining 12.5 percent and Smallcap index increasing 14 percent in the March quarter.

The March quarter began with the IPO of Indian Railway Finance Corporation, a finance subsidiary of Indian Railways, which raised Rs 4,633.38 crore, the highest by a single company in the quarter.

Brookfield India Real Estate Trust, India’s only institutionally managed public commercial real estate firm sponsored by an affiliate of Brookfield Asset Management, raised by the second-highest amount of Rs 3,800 crore.

Indigo Paints, Home First Finance Company India, and Kalyan Jewellers were at the third spot in terms of fundraising as they raised over Rs 1,150 crore each by their public offers in the March quarter.

Among others, Nazara Technologies, Suryoday Small Finance Bank, Stove Kraft, Kalyan Jewellers India, Heranba Industries, MTAR Technologies, Easy Trip Planners, Anupam Rasayan India, RailTel Corporation of India, Craftsman Automation, Laxmi Organic Industries, and Barbeque Nation Hospitality accumulated in the range of Rs 400 crore to Rs 800 crore through IPOs.

The smallest among mainboard IPOs was Nureca, a healthcare and wellness products distributor, which raised up to Rs 100 crore through its public offer.

The period ahead is predicted to be strong for the primary market only if the sentiment continues to be positive along with money flow, experts believe.

“Most companies would like to access the capital markets when the sentiments are positive as the valuations are always richer in such times and the ease of subscription goes up. We are now looking at a multi-year rally and if the market sentiments remain bullish, there should be a spate of IPOs in the coming years,” Raghvendra Nath, MD at Ladderup Wealth Management stated.

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