Fluctuating Market Fails To Dampen Lust For IPOs In 2015

The IPO market is bustling with activity. At least, so it seems when compared to the last two years when corporates shied away from launching their issues on Dalal Street.

Companies across diverse sectors including airlines, quick service restaurants, pharmaceutical and electronics have made their way into the IPO space this year, despite a roller-coaster ride on the Indian bourses earlier this year following a spate of issues that rocked the global and Asian market coupled with lack of clarity over certain regulatory proposals back at home.

The most talked about issues of 2015 include IndiGo's parent InterGlobe Aviation, drug maker Alkem Laboratories, Coffee Day Enterprises which runs coffee chain Cafe Coffee Day. Inox Wind, a wind power solutions provider and digital cinema distribution network UFO Moviez India, too, need a special mention as they feature in the top 10 list. In the healthcare space, there have been a spate of IPOs and these include those of Dr Lalpathlabs and Narayana Hrudayalaya. There are several others who are also planning to come up with their issues soon and have thus filed their DRHPs for the same!

“The IPO market shows a revival in the last three years,” said Pranav Haldea, Managing Director of PRIME Database, a capital market research firm. “Going forward, the momentum is expected to continue as the pipeline of companies to hit the bourses is strong,” he added. As per data available with Prime Database, the number of IPOs is expected to touch 63 this year from 45 in 2014. While the increase in number is not that significant, what is noteworthy is the amount that corporates have raised this year. There has been a manifold jump in terms of value this year with corporates expected to raise Rs 13,854 crore as against Rs 1,468 crore in 2014. This goes on to indicate that that the issues that that hit the capital market are of sound companies that have good fundamentals and equally good corporate governance. Year before last, in the calendar year of 2013, as many as 38 IPOs were raised worth Rs 1619 crore.

What’s more, the flurry of IPOs on the bourses has also paved exits several private equity investors who were so far waiting with baited breath to reap results of their investments. Data available with research firm Venture Intelligence reveals a significant jump in the number of exits in the private equity space through various option including public market sales, buyback, secondary sale and strategic sale. In terms of value, in the first 11 months of 2015, PE and VC investors made $8.7 billion, way higher than the entire 2014 where they made $4.3 billion. A significant portion of this can be attributed to opening up of public markets that prompted companies to launch their IPOs. PE firms enchased 2628 million from public market sales in the January-November period this year.