Companies raised Rs 39,127 crore through the equity market in 2014, down 14 percent from Rs 45,440 crore raised in the preceding year, according to Pranav Haldea, managing director, PRIME Database. The latest figure is well below the highest amount ever raised at Rs 99,022 crore in 2010.
The biggest disappointment and the reason behind the poor show were the continuous deferment of several PSU offerings, says PRIME Database.
The saving was the 33 QIPs this calendar year, which saw Rs 31,684 crore being raised from institutional investors, the highest in 5 years, accounting for 81 percent of the total amount mobilized this year, says Haldea.
The largest QIP of 2014 was the State Bank of India QIP in January 2014 raising Rs 8,032 crore.
The other form of fund raising, Offers For Sale (OFS) – one of the major routes used in the last two years – saw a huge drop to just Rs 5,000 crore from Rs 23, 964 crore raised last year. It is used primarily for helping promoters of already-listed companies in complying with the minimum public shareholding (MPS) requirement.
Even discounting the deferred PSU offerings or divestments by the government, IPOs or the lack of it were a huge disappointment. Only six main IPOs came into the market – Sharda Cropchem , Monte Carlo Fashions , Snowman Logistics , Wonderla Holidays , Shemaroo Entertainment and NCML Industries, collectively raising just Rs 1,261 crore, lowest in 13 years. Of the six IPOs, three received good response from the public – Sharda Cropchem at 51 times, Snowman Logistics at 46 times and Wonderla Holidays at 32 times.
According to Haldea: “The pipeline is looking much stronger with seven companies wanting to raise Rs 2,965 crore already holding Sebi approval and another 12 companies wanting to raise Rs 5,362 crore awaiting the approval of the market regulator.”
The year, however, witnessed a flurry of activity on the SME platform with as many as 40 SME IPOs which collected a total of Rs 267 crore, against 35 IPOs raising Rs 335 crore in the previous year.
2014 continues to highlight the dismal state of fund raising through IPO route by unlisted companies in the last four years.
According to PRIME, 2014 saw just one FPO of Engineers India at Rs 497 crore and one IPP of Muthoot Finance at Rs 418 crore.
On an overall basis, PSUs raised just Rs 2,277 crore or 6 percent of the total equity mobilisation (Engineers India FPO and OFS of SAIL , Nalco and NTPC ). This was much lower than Rs 25,354 crore which had been raised in 2013.
(Posted by Devika Ghosh)