IPOs hit four-year low

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Growth may have slowed, but markets continued with their bull run during the year. However, the sentiments weren’t echoed by companies launching initial public offerings (IPOs). According to Prime Database, from January to December 11, companies raised ₹11,861.56 crore, the lowest in four years, and a drop of 62 percent compared to the same period last year (₹30,959.07 crore).

This year’s largest IPO was led by Sterling and Wilson Solar Ltd which raised ₹2,849.64 crore. In May-end, it sold its shares at ₹780 apiece during its IPO; they now trade at ₹288.9 per share, a drop of 62.9 percent. Other companies which listed during 2019 such as IRCTC Ltd and IndiaMart InterMesh Ltd have provided returns of over 100 percent to its investors since their IPO. "In the next two quarters starting the calendar year, we expect IPOs to pick up,” says Sourav Mallik, joint managing director at Kotak Investment Banking.

One issuance which caught investor attention was the listing of India’s first real estate investment trust—Embassy Office Parks—which raised ₹4,750 crore with domestic high net worth individuals and family offices lapping it up.

Listed firms depended heavily on qualified institutional placements (QIPs) to raise capital. Since January, companies raised ₹35,238.14 crore compared to ₹16,587.43 crore during the corresponding period last year, a two-fold increase. The activity picked up significantly since September. The fund raise has largely been led by Axis Bank Ltd which raised ₹12,500 crore followed by Bajaj Finance Ltd (₹8,500 crore). “Next year I again expect QIPs to be dominated by banks as they need to shore up capital," says Pranav Haldea of Prime Database.