Mumbai: India Inc has raised a record Rs 74,000 crore from IPOs and offers for sale so far in 2017 but 80 per cent of the fundraising was done by finance companies, according to an ET study. Most of the funds raised are from offers for sale — promoters selling their stakes and pocketing the proceeds, which is an indicator that private investment demand is yet to pick up in the country.

“For strong markets to boost the economy, companies must raise funds to invest or repair balance sheets,” said Neelkanth Mishra, managing director and the India equity strategist at Credit Suisse. “Maximum FY18 fund-raising is in financials while even for non-financial companies, a meaningful sum is just secondary sales.”

Other than financial services, retail services sector has netted about 3 per cent of the total IPO money raised so far in 2017. The share of sectors like pharmaceuticals, FMCG and shipping is 2 per cent each.

“This is the trend in a booming market where promoters or private equity players are cashing in from the primary markets at higher valuations,” said VK Vijayakumar, an investment strategist at Geojit Financial Services. “However, ultimately that money too will come back to economy in one or the other way”.

Cash-intensive sectors like utilities, energy, metals and cement of late have not raised any funds from the IPO market.



In the previous boom in 2007, around 96 per cent of the Rs 29,000 crore raised was fresh capital. India Inc’s capital expansion has declined over the years due to slowdown in economic recovery, excess capacity and high debt burden.

At least two dozen companies have lined up for new share sale proposals. Majority of the big- ticket forthcoming IPOs are from the services sector.