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IPO fund raising in India halves in 2022; 40 firms raised ₹59,412 crore

03 Jan 2023 Zinkpot 143

Business Standard -  Forty Indian corporates raised ₹59,412 crore through main board IPOs in calendar year 2022, half of the Rs 1,18,723 crore mobilised by 63 IPOs in 2021, according to PRIME Database, India's premier database on the primary capital market. Read more

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  • After a record 2021, 2022 turned out to be sort of muted for IPOs. As major central bank around the globe tightened liquidity and raised interest rates to tame high inflation, and Ukraine was invaded by Russia, volatility prevailed in the equity markets. That had an impact on the primary market too, with fewer companies choosing to go public in the turbulent times.
  •  What is an IPO?  When a private company first sells shares of stock to the public, this process is known as an initial public offering (IPO). In essence, an IPO means that a company's ownership is transitioning from private ownership to public ownership. For that reason, the IPO process is sometimes referred to as 'going public'.
  • In calendar year 2022, 40 Indian corporates raised ₹59,412 crore through main board IPOs, which is approximately half of what was raised via 63 IPOs in 2021, according to PRIME Database.
  • The largest IPO in 2022, which was also the largest Indian IPO ever, was from the Life Insurance Corp of India (Rs.20,557 crore). This was followed by Delhivery (Rs 5,235 crore) and Adani Wilmar (Rs. 3,600 crore).
  • According to Pranav Haldea, Managing Director, PRIME Database Group, Rs 20,557 crore, or a huge 35% of the amount raised in 2022, was by LIC alone.
  • As many as 17 out of 40 IPOs, or nearly half, came in the last two months of the year alone, which shows the volatile conditions prevalent through most of the year which are not conducive for IPO activities.
  • The overall response from the public, according to Prime Database was moderate. Of the 38 IPOs for which data is available presently, 12 IPOs received a mega response of more than 10 times while 7 IPOs were oversubscribed by more than 3 times.
  • In comparison to 2022, the response of retail investors also moderated. The average number of applications from retail dropped to just 5.92 lakh, in comparison to 14.25 lakh in 2021 and 12.77 lakh in 2020.
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