MUMBAI: After a record-breaking Rs 1.35 lakh crore IPO rally from 65 issuers so far this year, the market frenzy is set to continue next year with new issues worth over Rs 2 lakh crore ($26 billion). According to a report, Pipeline.
The year 2021 saw the highest ever IPO volume in the country rising to $15.3 billion as compared to $4.2 billion in 2020. The number of listings and the amount raised, Kotak Mahindra Capital Company told reporters on Tuesday.
And, the IPO frenzy is set to continue next year, with $26 billion worth of issues in the pipeline, the brokerage said.
It said new issues will be dominated by resilient sectors such as new-age technology, healthcare, consumer, realty and specialty chemicals issues.
While IPOs worth $15 billion have already been filed with SEBI, issues worth $11 billion are likely to be filed by several high-quality companies in large-cap and mid-cap. This means that there will continue to be a boom from companies in raising IPO funds.
Overall, 2022 will be good for the capital fundraising market, V Jaishankar, whole-time director at the brokerage, told reporters.
He said the brokerage led 19 of 26 IPOs worth over $200 million and helped raise $7.96 billion from 18 issuances.
The average IPO size also rose significantly, reaching Rs 2,000 crore, with seven of the 65 companies raising between $250 million and $500 million through primary share sales, compared to two in the previous year. Issue Street was dominated by digital companies.
S Ramesh, MD & CEO, Kotak Mahindra Capital, said that the year 2021 has been a year of retail investor revolution, in which they have become leaders rather than followers. “While 2021 was huge for IPOs, we expect 2022 to be another good year, yet investors should remain cautious and not take all IPOs as bullshit.”
On investment banking fees collected by i-bankers from the busiest capital markets year ever, the fee pool crossed $1 billion for the first time, an increase of nearly 25 percent over 2020.
The hike in fees is on account of increase in volumes along with higher margins and a surge in initial public offerings (IPOs).
The brokerage said overall M&S in 2021 is upbeat, rising four per cent to $118 billion in the first 11 months, compared to $114 billion in 2020.
It added that deal-making inbound transactions, GIC’s investments in IRB, financial investments in NCube Ethicals, Byju’s, Swiggy and Paytm, Prosus by BillDesk and other large buy-outs such as Carlyle-Hexaware, Fullerton were taken over by the company. -Sumitomo, etc.
The year also saw transactions like acquisition of BigBasket, 1MG and Tejas Networks by Tata, Acquisition of Spoton by Delhivery, Thyrocare by Pharmacy.
Private equity/venture capital funds of $58.3 billion flowed into 968 domestic companies in the country, which is almost 10 times the FPI inflows of $4 billion. Also, the total amount invested in 2021 is more than the combined value of investment in 2019 and 2020 excluding Reliance Retail and Reliance Jio investments.
This year $58.3 billion was invested in 968 companies, while $37.6 billion was invested in 671 companies, including $16.3 billion in Reliance Retail and Jio. Of the investments, $15.9 billion were buyouts, $27.2 billion was minority investments in digital and $4.2 billion was minority investments in enterprise tech companies. And, buyouts account for 25 per cent of the total PE deal value since 2018.
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