Mumbai: The primary market is buzzing with a strong pipeline of new issuance lined up in the coming months. About 25 companies are looking to hit the market with their initial public offerings to scoop up over Rs 25,000 crore from the public market.
This week would see one the largest issues in the past six years with private insurance major ICICI Prudential Life Insurance hitting the market with its Rs 6057 crore IPO, the largest since Coal India’s Rs 15,200 crore mega issue in 2010.
All eyes are on the issue as the success of which could mark the beginning return of large corporate houses to the domestic primary market to raise funds.
ICICI Bank is offloading 12.7 per cent stake in its insurance arm to raise Rs 6057 crore, making it the fifth-largest IPO in the domestic capital market.
After being in doldrums since 2010, the IPO market has seen a revival over the past one-and-half years as companies have started entering the capital market with new share issuance.
Since January 2015, around 45 companies have tapped the market to raise Rs 25,550 crore from the primary market which is almost double the total funds raised in four years preceding years.
During the period between 2011-14, primary market was in a slump with just Rs 15,284 crore issuance in four years. The current round of issuance are mostly from companies in growth sectors focused on consumer, niche financial services, logistics and healthcare.
The IPO market saw some marquee offerings such as Interglobe Aviation, Coffee Day Enterprises Ltd, Narayana Hrudayalaya, Dr Lal PathLabs, Thyrocare, Equitas and micro finance player Ujjivan Financial.
Interestingly, bulk of these issues was from private equity backed companies looking to give exit for their investors who have provided growth capital when equity market was in a slump. “The primary market has revived over the past one-and-half years with quality companies coming to tap the market. And there is widespread participation from all sets of investors including retail, HNI and domestic and foreign institutional players,” says V. Jayasankar senior executive director and head of equity capital markets Kotak Investment Banking.
In the recent past, it mainly was mainly smaller companies with IPO size of sub-Rs 1000 crore came into the market. Now bigger groups like L&T and ICICI group is entering the market. There is even talks that telecom major Vodafone would come out with a mega issue.
