Leading the equity issuance surge during the first two months were IPOs from the small and mid-cap (SME) segment, with 44 of these companies getting listed in the first two months of the current fiscal (FY25).
In just the first two months of financial year 2024-25 (FY25), Indian corporates have mobilised Rs 84,866 crore through equity issuances, including initial public offerings (IPO), follow-on public issues and preferential allotment. In the twelve months of FY24, corporates had raised Rs 67,956 crore from the IPO market and are expected to mobilise over Rs 1 lakh crore through primary issuances in the current fiscal.
Leading the equity issuance surge during the first two months were IPOs from the small and mid-cap (SME) segment, with 44 of these companies getting listed in the first two months of the current fiscal (FY25). This comes amid the Securities and Exchange Board of India (Sebi) Chairperson Madhabi Puri Buch raising concerns over manipulation in the listing of SMEs a few months back.
While 44 companies got listed on SME platforms of the BSE and the NSE in April and May, there were a total of 52 listings (main board IPOs plus SME IPOs) during the two month period. In fiscal 2023-24, the total number of SME companies that were listed was 196.
A total of 21 SMEs got listed in April, raising Rs 527 crore, while there were 23 SME IPOs which mobilised Rs 673 crore in May, according to the data from Sebi data.
In March this year, the Sebi Chairperson had said that there were signs of price manipulation in SME IPOs and trading of such shares in the secondary market. “The reality is that SMEs are relatively small entities, the market is small, the free float is small, it is relatively easy to manipulate both at the IPO level and the trading level,” Buch had said.
Some of the SMEs that raised capital through IPO route in April and May 2024 included ABS Marine Services (Rs 96.29 crore), Trust Fintech Ltd (Rs 63.45 crore), Creative Graphics Solutions India (Rs 54.4 crore), Quest Laboratories (Rs 43.16 crore) and Indian Emulsifiers (Rs 42.39 crore). All SME IPOs witnessed higher participation from retail investors and also were listed at a premium.
In order to check volatility in the listing of SMEs, NSE, on Thursday, introduced an overall capping of 90 per cent on the opening price discovered during a special pre-open session for IPOs on its SME platform. This means the listing day price of any SME cannot go above 90 per cent of the issue price.
India Inc raised Rs 14,661 crore through eight main board IPOs in April and May, the data showed. Some of the main board IPOs included Aadhaar Housing Finance (Rs 3000 crore), Go Digit General Insurance Rs 2,614 crore and Awfis Space Solutions Ltd (Rs 599 crore).
Indian corporates raised Rs 67,956 crore from the IPO market in FY24 and they are expected to mobilise over Rs 1 lakh crore through primary issuances in the current fiscal. The rise in the number of companies raising money through IPOs can be attributed to the strong macroeconomic growth of the country, stable government and interest rates, and ease in inflation.
According to Sebi data, corporates did not raise money through the follow-on public offer route in May this year. However, in April, Rs 18,000 crore was raised through a single FPO of Vodafone Idea, which was the largest issue in the country. Funds amounting to Rs 3,798 crore were raised through 20 rights issues in April and May.
Funds raised through preferential allotment during the two months stood at Rs 32,695 crore. The amount raised through QIP (Qualified Institutional Placement) stood at Rs 14,512 crore in the period.
In May 2024, Rs 1,207 crore was mobilised through the public issue of debt, compared to the Rs 687 crore raised during April. Private placement of debt raised Rs 61,227 crore in May, compared to Rs 30,508 crore in April.