India Inc raises all-time high of Rs 1.89 lakh crore from equity market in FY21

Equity Market: Through the outbreak of COVID-19 and the fall of the macroeconomic environment across the world. India Inc’s fundraising from the equity market hit an all-time high in FY21, PRIME Database has said.

Moreover, Indian corporates raised an all-time high amount of Rs. 1,88,900 crore through public equity markets. This was more than double the Rs. 91,670 crore that was raised in 2019-20, according to Pranav Haldea, Managing Director, PRIME Database Group.

The previous highest amount raised in a financial year was Rs. 1,75,680 crore in 2017-18. PRIME Database provides data on the capital market. As per its website, it offers other services too, including database creation and management, content generation, website development and management, information consulting and data cleaning, and standardization to other organizations.

On the other side, the total amount of Rs. 1,88,900 crore, the fresh capital amount was Rs. 1,36,992 crore. The remaining Rs. 51,908 crore being offered for sale, said Haldea. While strong retail participation in IPOs huge listing gains and the highest-ever amount raised through QIPs and InvITs/REITs were among the key highlights of FY21.

Mainboard IPOs;

As many as 30 main-board initial public offerings (IPOs) hit the market, collectively raising about Rs. 31,268 crore in FY21. while this was an increase of 54 percent from the Rs. 20,350 crore raised through 13 IPOs in FY20, Haldea said.

On the other side, 18 IPOs received a mega response of more than 10 times, while four offerings were oversubscribed by more than three times, and eight were oversubscribed between one and three times, Haldea said. The largest IPO in 2020-21 was from Gland Pharma for Rs. 6,480 crores. The average deal size was Rs. 1,042 crore.

SME IPOs;

Activity in the SME IPO segment further declined year-on-year in FY21. There were only 28 SME IPOs, which collected a total of Rs. 243 crore in comparison to 45 IPOs in 2019-20 which collected Rs. 436 crore, Haldea said.

OFS (SE);

Offers for sale (OFS), which is for the dilution of promoters’ holdings, saw an increase from Rs. 17,326 crore raised in 2019-20 to Rs. 30,114 crore in 2020-21. Of this, the government’s divestment accounted for Rs. 19,927 crores, or 66 percent of the overall amount, data from the PRIME Database shows.

The largest OFS was that of Tata Communications (Rs. 5,386 crores) followed by Hindustan Aeronautics (Rs. 4,961 crores) and IRCTC (Rs. 4,408 crores).  Offers for sale accounted for 11 percent of the total year’s public equity market amount, data from primedatabase.com showed.

Follow-on public offers (FPOs);

FPO’s made a comeback after several years. This was primarily on account of the Yes Bank FPO, which raised Rs. 15,000 crore. Overall, two companies mobilized Rs. 15,029 crore through FPOs, PRIME Database data shows.

Qualified institutional placements (QIPs);

Moreover, 31 companies raised Rs. 78,731 crore through QIPs, the highest ever in a financial year. This was 54 percent higher than Rs. 51,216 crore raised in the previous year, said Haldea.

The largest QIP of 2020-21 was from ICICI Bank that raised Rs. 15,000 crore, accounting for 19 percent of the total QIP amount. QIPs were dominated by banks, NBFCs, and real estate companies, accounting for 84 percent (Rs. 66,141 crores) of the overall amount. Moreover, the year also saw the first-ever REIT QIP.

InvITs/ReITs;

The amount raised through infrastructure investment trusts (InvITs) and real estate investment trusts (REITs) saw an increase of 1,353 percent to an all-time high of Rs. 33,515 crore from Rs. 2,306 crore in 2019-20.

Divestments;

The FY21 did not see a significant amount of fundraising through divestments, with only Rs. 33, 159 crores being raised by the government. While public offers (IPOs of IRFC, Mazagon Dock, Railtel, and OFC of Bharat Dynamics, HAL, IRCON International, IRCTC, RVNL, SAIL, and TATA Communications) at Rs 22,594 crore. While it was the most used mode followed by buyback (EIL, GAIL, HPCL, KIOCL, NMDC, NTPC, NALCO, and RITES) at Rs. 6,441 crore, said Haldea.

Rights issues;

Mobilization of resources through rights issues, according to primedatabese.com, reached an all-time high of Rs. 64,256 crore in 2020-21, which 15 percent higher than Rs. 55,998 crore raised in 2019-20.

Public bonds;

The public bond market saw a near 31 percent decrease with 18 issues raising Rs. 10,488 crore in comparison to 35 issues raising Rs. 15,146 crore the previous year. The largest issue was from PFC, raising Rs. 4,429 crore, data from PRIME Database shows.

Debt private placements;

The amount raised through debt private placement reached an all-time high of rs. 7,02,697 crore, up from Rs. 6,75,236 in 2019-20. While this was mobilized by 656 institutions and corporates. The highest mobilization through debt private placements during the year was by NABARD (Rs. 59,072 crores) followed by REC (Rs. 50,370 crores), HDFC (Rs. 49,843 crores), NHAI (Rs. 44,953 crores), and PFC (Rs. 40,966 crore), said Haldea.

Indian companies also raised Rs. 2.30 lakh crores through overseas borrowing down 55 percent from Rs. 5.07 lakh crores in 2019-20, Haldea said.