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A total of Rs 5,000 crore worth of initial public offerings (IPOs) of four companies — One Mobikwik Systems, Skanray Technologies, Penna Cement Industries, and ESAF Small Finance Bank — are set to lapse this month. The IPOs were given Sebi’s approval in October 2021.
According to the markets regulator Sebi’s guidelines, the IPO needs to be launched within one year of approval or issuance of observations by the capital market watchdog. As the approvals for the four IPOs were given last year, the one-year deadline is expiring this month, according to a Moneycontrol report.
One Mobikwik Systems, which filed IPO draft papers with the regulator last year, planned to raise around Rs 1,900 crore. The launch has been delayed since then due to unfavourable market conditions. The listing of One97 Communications, which is the owner of Paytm, was also disappointing last year.
Skanray Technologies aimed to mop up around Rs 500 crore, Penna Cement about Rs 1,550 crore, and ESAF Small Finance Bank about Rs 1,000 crore.
According to data from PRIME Database, a total of 14 Indian companies raised Rs 35,456 crore through mainboard initial public offerings (IPOs) in the first half of 2022-23, which is 32 per cent lower than the Rs 51,979 crore raised through 25 IPOs in the corresponding period last year. About Rs 20,557 crore, or 58 per cent of the amount, during April-September 2022 was raised just in the LIC IPO.
Overall public equity fundraising also dropped 55 per cent to Rs 41,919 crore, from Rs 92,191 crore in the corresponding period of the previous year. The largest IPO in this period, which was also the largest Indian IPO ever, was from Life Insurance Corporation (LIC) for Rs 20,557 crore.
In comparison to 2021-22, the response of retail investors also moderated. The average number of applications from retail dropped to 7.57 lakh, in comparison to 15.56 lakh in 2021-22 and 12.49 lakh in 2020-21. The highest number of applications from retail were received by LIC (32.76 lakhs) followed by Harsha Engineers (23.86 lakhs) and Campus Activewear (17.27 lakhs).
The amount of shares applied for by retail by value (Rs 23,880 crore) was 32 per cent lower than the total IPO mobilisation (in comparison to being 41 per cent higher in 2021-22), showing the lower enthusiasm from retail during the period. The total allocation to retail was Rs 9,841 crore, which was 28 per cent of the total IPO mobilisation (slightly up from 23 per cent in 2021-22).
IPO response was further muted by moderate listing performance. Average listing gain (based on the closing price on listing date) fell to 12 per cent, in comparison to 32 per cent in 2021-22 and 42 per cent in 2020-21. Of the 14 IPOs, six gave a return of over 10 per cent. Harsha Engineers gave a stupendous return of 47 per cent, followed by Syrma SGS (42 per cent) and Dreamfolks (42 per cent). Eleven of the 14 IPOs are trading above the issue price (closing price of September 26, 2022).
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