1 week Ago By Sai Aravindh
India's top companies mopped in more money this year than in any year via multiple instruments buoyed by positive investor sentiment and the urge of mom-and-pop investors to create wealth by capitalising on the booming stock market. Domestic firms raised a record Rs 1.64 lakh crore via 90 maiden public issues with an already strong pipeline for the upcoming year.
A record Rs 1.39 lakh crore was mopped in via share sales to institutions. The total amount raised via rights issue was the highest since 2021.
Vodafone Idea raised Rs 18,000 crore through a follow-on public offer. The total amount raised via public issues in 2024 exceeded Rs 49,436 crore garnered by 57 firms in 2023. The final month of the year witnessed a frenzy in the primary market with 15 companies raising Rs 25,500 crore, the highest in 17 years.
Increased acceptance of equity investments for wealth creation, positive market sentiments, robust equity flows and sustained growth potential are the factors driving the record fundraising, according to Narendra Solanki, Head Fundamental Research - Investment Services, Anand Rathi Shares and Stock Brokers. "This trajectory is likely to continue, bolstered by the diversification of listed companies and the ongoing evolution of the equity investment culture in the country." The initial public offerings this year also saw the country’s biggest-ever listing, with Hyundai Motor Co.
’s local unit raising Rs 27,870.1 crore. Food-delivery firm Swiggy Ltd.
and NTPC Green Energy Ltd. — topped Rs 10,000 crore. Further, the IPO subscription ratios have been exceptionally high this year with Vibhor Steel Tubes Ltd.
seeing an impressive subscription of 320 times. Meanwhile, offerings like KRN Heat Exchanger and Refrigeration, Manba Finance, and Gala Precision Engineering were each subscribed over 200 times. Additionally, IPOs of companies like One MobiKwik Systems, Unicommerce eSolutions, Diffusion Engineers, BLS E-Services, and Exicom Tele-Systems were subscribed more than 100 times.
The BSE IPO, a gauge that tracks the performance of companies for two years after the offering, shows that recently listed companies have returned about 30% gains in 2024 against a gain of 40% in 2023. The frenzy in the SME segment also continued with a record 238 small firms raising Rs 8,700 crore, nearly doubling the Rs 4,686 crore raised in 2023. The Rs 10.
01-crore public issue of Nacdac Infrastructure Ltd. saw a record subscription of 2,209.76 times, with retail investors bidding 2,503.
66 times their allotted portion. Fundraising via qualified institutions placements surged to a level never seen before with total funds raised nearing Rs 1.4 lakh crore, the highest since 2020.
Total funds raised through share sales to top institutions in 2023 stood at Rs 54,350 crore. The remarkable growth in QIPs reflects the resilience of Indian capital markets, bolstered by strong stock market performance, higher valuations, and robust investor demand. Vedanta Ltd.
and food delivery service Zomato Ltd. were the top two donors with Rs 8,500 crore each, followed by Adani Energy Solutions Ltd. and Varun Beverages Ltd.
with Rs 8,373 crore and Rs 7,500 crore, respectively. Foreign investors have also been piling into India's primary market in search of better returns when the stock market was pricey during the year. Their primary market purchases, including IPOs and preferential share sales, hit $14.
billion this year, surpassing the previous record set in 2021, according to data published by National Securities Depository Ltd. The IPO pipeline for the next year is set to feature major offerings, including HDB Financial Services' proposed Rs 12,500 crore issue, LG Electronics India's Rs 15,000 crore public float, and Hexaware Technologies' Rs 9,950 crore offering. The momentum in the primary markets should continue going into the new year as investors continue to look to take part in the growth story, Solanki said.
In the immediate term, there are no risk to demand from investors due to healthy liquidity in the markets. "Strong retail participation should continue because the factors behind this growth are long-term.".
