InvestorQ : How have the equity market collections been for Indian markets during the 2020?
diksha shah made post

How have the equity market collections been for Indian markets during the 2020?

Sam Eswaran answered.
3 years ago

It is fairly surprising that despite the pandemic and the lockdown the year 2020 has been one of the best years in terms of equity market capital collections. Both, India’s primary and secondary markets continued to see robust issuances during the year despite the markets being almost dormant for a good part of the first half of the year.

In fact, fund raising from equity markets in year 2020 was 116% higher at Rs.177,500 crore. This is the total capital raised through equities across various modes including IPOs, OFS and other market issuances. This also includes the equity issues made by real estate investment trusts or REITs and the Infrastructure Investment Trusts or INVITs.

Interestingly, this is an all-time record as it also beats the previous record for equity issuances at Rs.160,032 crore in the year 2017. During the that year, the IPO issuances stood at Rs.75,000 crore on the back of a slew of mega PSU divestment issues. This year figure excludes the Rs.4300 crore that the government is raising through is stake sale in IRFC.

The break-up for the current year is something as under. IPOs accounted for Rs.26,770 crore, FPOs added up to Rs.15,024 crore, OFS managed to raise Rs.21,458 crore, QIPs collected Rs.84,501 crore and finally REIT/INVITs managed to raise a sum of Rs.29,715 crore. The FPO market was entirely accounted by the follow-on offer of Yes Bank.

In the latest report put out by Prime Database, Prithvi Haldea observed that out of the 15 IPOs in 2020, 5 companies already had PE/VC investment. What is also noteworthy is that out of the 15 IPOs, 13 had institutional anchor investors, which added confidence to the entire IPO process and gave a new institutional meaning to it.