ET Intelligence Group: Indian companies may mop up Rs 40,000-50,000 crore through the
initial public offering(IPO) route in 2020, an analysis of the draft red herring prospectus (DHRP) filed by companies with the market regulator and pitch notes of investment bankers show.
It would be nearly four times higher compared with the Rs 12,362 crore raised by 16 companies in 2019 on the main exchange boards, which was the lowest in five years.
Among the prominent IPOs that may hit in the first half of the new year are
SBICards & Payment (issue size of Rs 9,000-10,000 crore), UTI Asset Management Company (Rs 3,500-4,000 crore),
Burger King(Rs 400 crore), Home First Finance (Rs 1,500 crore) and Computer Age Management Services (Rs 1500 crore).
The later part of the year may witness the public issues of Mazagon Dock Shipbuilders, Equitas Small Finance Bank, Emami Cement, Easytrip Planners (which operates easemytrip.com), Puranik Builders, Samhi Hotels, and Indian Renewable Energy Development Agency.
Pranav Haldea, managing director at Prime database said, “There is a robust pipeline of IPOs if the secondary market continues to improve and assuming no major negative surprises from the Union Budget.” According to Prime database, 21 companies having approvals from the Securities and Exchange Board of India (Sebi) plan to raise nearly Rs 18,700 crore while 13 other companies are waiting for the approval to raise over Rs 18,000 crore.
“Sentiments have improved for the IPO market and enquiry levels from corporates have increased multi-fold. If market returns from the existing stocks become broader over the next two-three quarters, we may see fresh IPOs worth more than Rs 40,000 crore in 2020,” said an investment banking head of a leading domestic private bank. “Our calendars are quite tight in the first quarter of 2020 and we have already scheduled road shows for five-six companies in Singapore, Hong Kong and the United States.”
Interestingly, the returns of the companies that debuted on bourses in 2019 are promising. Their median return was 42.6 per cent over their issue prices, according to the data compiled by the ET Intelligence Group.
Stocks including IRCTC, Affle India, and
IndiaMARTInter-MESH have doubled from their issue prices. Nearly four out of every five IPOs in 2019 earned returns for investors. The S&P BSE IPO Index, an index comprising companies that raised money in the past two years, rose by 36 per cent in 2019 compared with a gain of 13 per cent of the S&P BSE Sensex.
2019's India's IPO proceeds lowest in 4 years
Revival on the cards for IPO mart?
27 Dec, 2019
Indian initial public offerings tumbled to a 4-year low by value in 2019 as the economy slowed, but some analysts are hoping for better in 2020 on the back of potential government reforms likely to boost stock markets.
What's behind the decline?
27 Dec, 2019
Financials and industrial sectors led the declines in IPO issues, with proceeds more than halving. “Because of different types of disruptions, such as corporate failures and bankruptcies, things have slowed down considerably,” Khetan said.
2019 IPO proceeds at 4-year low
27 Dec, 2019
Funds raised by Indian IPOs fell to just $2.8 billion this year, the lowest in four years, according to data from Refinitiv. In 2017, the proceeds hit a record $11.7 billion before falling to $5.5 billion in 2018. “2019 has been the worst year from an IPO market perspective,” said Sandip Khetan, a partner at consultancy EY.
IPO report card for 2019
27 Dec, 2019
Many of this year’s IPOs have performed well, boosting the outlook for more issues next year. Shares of Indian Railway Catering and Tourism Corp Ltd (INIR.NS), marketing and advertising firm Affle (India) (AFFL.NS), and e-commerce company Indiamart Intermesh (INMR.NS) have doubled in value from their issues prices. The S&P BSE IPO index. BSEIPO, which measures the performance of companies listed at the Bombay Stock Exchange after the completion of their IPOs, has surged 34% this year, outperforming broader indexes such as NSE Nifty 50 and BSE Sensex.
Corporate tax cut boosts Nifty
27 Dec, 2019
India's NSE Nifty 50 index. NSEI was down about 1.4% for the year on September 19, a day before the announcement of a cut in the corporate tax rate boosted markets and raised hopes of more reforms to help the economy. The NSE index was up 12.4% in 2019 as of Tuesday’s close. “The government has addressed a lot of economic reform requirements in the last three months,” said EY’s Khetan.
The fund raising from the rights issue and through
qualified institutional placement(QIP) also gained prominence in 2019 as corporates needed capital to meet regulatory obligations. Fifteen companies raised Rs 52,053 crore from rights issue in 2019, the highest amount in five years.
A major portion was accounted for by
VodafoneIdea’s issue of Rs 25,000 crore and
Bharti Airtel’s Rs 24,939-crore issue.
Foreign portfolio investors (FPIs) invested $3.9 billion in intitial public issues and qualified institutional placements of Indian companies during the year. They have also invested a net $9.9 billion through the secondary market.
IPO
via https://www.AiUpNow.com
December 30, 2019 at 09:39PM by , Khareem Sudlow
