QIPs and IPOs drive the fund-raising, doubling the corpus over the last fiscal
Led by a record number of qualified institutional placements and initial public issues, the pandemic-hit FY21 has been the best for fundraising, with companies raising a record Rs 1,88,900 crore in public equity sales during the year, more than double of Rs 91,670 crore in the previous fiscal, according to a report.
According to data compiled by PRIME Database on Tuesday, the previous best was in 2017-18 when companies had mopped up Rs 1,75,680 crore.
The qualified institutional placements (QIPs) garnered a record Rs 78,731 crore and initial public offerings (IPOs) mopped up Rs 31,268 crore, more than half of which took place this quarter.
Out of the total corpus of Rs 1,88,900 crore, fresh capital amount was Rs 1,36,992 crore (73 per cent), while the remaining Rs 51,908 crore being offers for sale.
PRIME Database Managing Director Pranav Haldea says strong retail participation in IPOs, huge listing gains and the highest-ever amount raised through QIPs and InvITs/ReITs were the key highlights of the fiscal.
This was the best year for QIPs, with 31 issues mobilising Rs 78,731 crore, the highest ever in a financial year, and this was 54 per cent higher than Rs 51,216 crore raised in 2019-20. The largest QIP was from ICICI Bank raising Rs 15,000 crore, accounting for 19 per cent of the total. QIPs were dominated by banks, while NBFCs and realty companies accounted for 84 per cent (Rs 66,141 crore) of the total pie.
The financial year 2020-21 also saw the first-ever ReIT QIP from Embassy Office Parks, raising Rs 3,685 crore. Contrary to the despondency due to the pandemic, 30 mainboard IPOs came to the market collectively raising Rs 31,268 crore, up 54 per cent over Rs 20,350 crore raised through 13 IPOs in 2019-20. The largest IPO in 2020-21 was the Rs 6,480-crore issue from Gland Pharma, while the average IPO issue was Rs 1,042 crore, he says.
More than half – 18 issues – of the 28 mainboard IPOs received a mega response of over 10 times while four were oversubscribed by more than three times and the balance eight were oversubscribed one to three times.
One of the main drivers for the IPO success was the huge retail participation. The highest number of retail applications was for Indigo Paints (25.88 lakh), followed by Mtar Technologies (25.87 lakh) and Mazagon Dock (23.56 lakh).
The response to IPOs was also buoyed by strong listing performance. Of the 28 IPO listings, 19 gave a return of over 10 per cent, based on closing price on listing date. Burger King gave a stupendous 131 per cent return, followed by Happiest Minds Technologies (123 per cent) and Indigo Paints (109 per cent). Moreover, 18 of the 28 IPOs are trading above the issue price.
The IPO pipeline continues to remain strong with 18 companies holding Sebi approval for a combined Rs 18,000 crore and 14 more are awaiting Sebi approval to raise nearly Rs 23,000 crore, according to Haldea.
Infrastructure investment trusts (InvITs) and real estate investment trusts (ReITs) saw an increase of 1,353 per cent to an all-time high of Rs 33,515 crore, from Rs 2,306 crore in 2019-20.
Fund mobilisation through rights issues reached an all-time high of Rs 64,256 crore in 2020-21, up 15 per cent over Rs 55,998 crore raised in 2019-20, primarily led by Reliance Industries’ Rs 53,124-crore issue. The rest came from 19 companies. The public bonds market saw a 31 per cent fall with 18 issues raising Rs 10,488 crore in comparison to 35 issues raising Rs 15,146 crore in 2019-20. The largest was PFC raising Rs 4,429 crore.
Offers-for-sale (OFS) saw a jump from Rs 17,326 crore in 2019-20 to Rs 30,114 crore in 2020-21. Of this, divestment accounted for Rs 19,927 crore or 66 per cent of the total with the largest OFS being Tata Communications (Rs 5,386 crore), followed by Hindustan Aeronautics (Rs 4,961 crore) and IRCTC (Rs 4,408 crore).
The OFS route of fundraising accounted for 11 per cent of the total year’s public equity markets amount, according to Haldea.
Follow-on-public offers (FPOs) made a comeback after several years primarily on account of the mega Yes Bank issue of Rs 15,000 crore and another petty issue of Rs 29 crore.
The primary issues from small and medium enterprises (SMEs) saw further decline in 2020-21 over 2019-20, as there were only 28 issues that collected a total of Rs 243 crore as against Rs 436 crore from 45 issues in 2019-20.
Private placements of debt reached an all-time high of Rs 7,02,697 crore up to March 26, up from Rs 6,75,236 in 2019-20. This was mobilised by 656 institutions and corporates. The highest mobilisation through debt private placements was by Nabard (Rs 59,072 crore) followed by REC (Rs 50,370 crore), HDFC (Rs 49,843 crore), NHAI (Rs 44,953 crore) and PFC (Rs 40,966 crore).
Companies also raised Rs 2.30 lakh crore through overseas borrowings, including external commercial borrowings, down 55 per cent from Rs 5.07 lakh crore in 2019-20.