Home Stock exchange Dynamic stock market: Range of IPOs in FY 22 highest in two decades

Dynamic stock market: Range of IPOs in FY 22 highest in two decades


The vibrant stock market sparked a wave of IPOs, with the FY22 range becoming the highest in the past two decades.

According to India Ratings and Research (Ind-Ra), the strong Initial Public Offering (IPO) issued in FY22 in the vibrant Indian stock market bodes well for the country’s economic recovery.

“In addition, the fundraising by the entities will not have a significant impact on their level of indebtedness, because the objective of the fundraising is largely to unlock the value proposition rather than to create new investments, “the rating agency said.

“Global issues reached a significant level after FY18 in terms of issue size, with four months left in the year.”

According to Ind-Ra, the trend from April to November 2021 showed that the number of IPOs for FY 22 stood at 71, or 856 billion rupees, compared to 272 billion rupees raised by 56 companies in the past. during the year 21.

“The enormous global liquidity due to the peak of fiscal and monetary expansion, strong investor appetite, favorable financial market conditions and a strong recovery in trading conditions have boosted the IPO market over the course of the year. EX22. “

“With the announcement of the IPO of Life Insurance Corporation of India of Rs 1,000 billion, the size of the issue could exceed Rs 2,000 billion by the end of the financial year, a record in terms of issue size. “

Notably, over the past five years, the industry trend highlights the significant jump in retail IPOs.

“It includes new age tech driven companies such as food aggregator Zomato Limited, fashion retail company Nykaa, online insurance broker Policy Bazaar Limited, car classifieds platform CarTrade. com and CAMS Limited. “

“The top 25 issues over the past three years amounted to Rs 833 billion, of which new age companies focused on Ahave technology accounted for Rs 418 billion.”

The agency said the increase in emissions by new-age tech-focused companies compared to traditional companies has more to do with unlocking value and brand recognition than the need for long-term investments. term or deleveraging.

Ind-Ra believes that in addition to a buoyant stock market, favorable policies have encouraged start-ups to issue IPOs this year.

In March 2021, the Securities and Exchange Board of India reduced the time period during which start-up investors must hold 25% of pre-issue capital to one year, down from two years earlier.

“The amended regulations, which previously prohibited companies that went public from making discretionary allocations, allow them to allocate up to 60% of the size of the IPO issue to an eligible investor subject to an IPO. 30-day blocking period on this stock. “

In addition, few players in the automotive sector also resorted to IPOs in FY22 after five consecutive years of absence, to finance working capital requirements and loan repayment.

“Within the healthcare sector, major issues were undertaken to resume investing activities and reduce borrowing. The FMCG industry has also seen a steady increase in IPO issues in the market. over the past five years and the recent increase can be attributed to international brands such as Sapphire Foods Limited and Devyani International Limited which intend to establish a network of retail stores in India. “


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(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

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