Despite all the disruptions caused by COVID-19 and economic slowdown Indian companies managed to raise record-high capital in 2020. Surpassing the previous year high of $1.6 trillion in 2017, fundraising through public equity capital in 2020 was at a record $1.7 trillion, as per the data by Prime Database.
Capital raised by India companies in the year 2020 is 116% higher than the previous year which was at ₹82,241 crore and ₹62,651 crore in 2018.
“Strong retail participation in initial public offerings (IPOs), huge listing gains and highest-ever amount raised through qualified institutional placements (QIPs) and infrastructure investment trust (InvITs)/ real estate investment trusts (REITs) were the key highlights of the year,” Pranav Haldea, Managing Director, Prime Database Group said.
In the primary markets, in 2019 there where 16 main-board IPOs which collectively raised ₹12,362 crore whereas in the current year it rose by 115% to ₹26,611 crore raised through 15 main-board IPOs. The largest IPO in 2020 was from SBI Cards for ₹10,341 crore. The average deal size was ₹1,774 crore.
Of the 14 IPOs which got listed, 10 offered a return of over 10% (based on the closing price on listing date). Burger King jumped 131% followed by Happiest Minds Technologies (123%), Mrs Bectors Food Specialities (107%), Route Mobile (86%), Rossari Biotech (75%), Chemcon Speciality Chemicals (72%), Gland Pharma (21%, Mazagon Dock (19%), Computer Age Management Services (14%) and Likhitha Infrastructure (14%).
Although, activity in Small and medium-sized enterprises (SME) IPO segment declined in 2020. In the year 2019, there were 51 SME IPOs which raised ₹624 crore whereas in 2020 there were only 27 SME IPOs, which raised a total of ₹159 crore.
According to data, ₹64,984 crore was raised through rights issues in 2020 which is also a record high, up 25% from ₹52,053 crore in 2019. Reliance Industries raised mega ₹53,124 crore through the mobilisation of resources through rights issues.
Through Qualified Institutional Placement (QIPs) 26 companies mobilized ₹84,50 which is 140% higher than ₹35,238 crore raised in 2019. QIPs were dominated by banks, NBFCs and telecommunication companies with them accounting for 84% ( ₹67,781 crore) of the overall amount. ICICI Bank raised ₹15,000 crore, the largest QIP of 2020.
The year 2020 also saw the first-ever REIT QIP (Embassy Office Parks raising ₹3,685 crore). The amount raised through InvITs and REITs saw an increase of 271% to ₹29,715 crore from ₹8,008 crore in 2019. Amount raised through debt private placement reached an all-time high of ₹7,51,395 crore (as on 24 December), up from ₹7,09,979 crore in 2019.
According to Haldea, the continuing buoyancy in secondary markets as also the listing performance of IPOs in the last few months have provided the impetus to the primary market. The IPO pipeline continues to remain strong with 28 companies holding Sebi approval wanting to raise nearly ₹28,706 crore and another seven companies wanting to raise nearly ₹4,410 crore awaiting market regulator’s approval.