INSUBCONTINENT EXCLUSIVE:
In 2022, 59 companies raised Rs 59,332 crore through going publics (IPOs)
However, not everyone was fortunate sufficient to realise their fund-raising strategies
Market volatility forced a number of companies to let approval given by the capital markets regulator-- the Securities and Exchange Board of
India (Sebi)-- lapse.
A business needs to introduce its IPO within one year after Sebis last observations.
In 2022, 28 such approvals lapsed
Together, they might have raised Rs 38,828 crore
The deal files which expired in December could alone have actually raised Rs 10,350 crore.
Industry players state some companies prepare to
re-file their draft red herring prospectus (DRHP) so that they can have another stab at listing
Some are looking at alternative methods of raising capital.
Go First, One Mobikwik Systems, ESAF Small Finance Bank, VLCC Healthcare,
Sterlite Power Transmission, and Keventer Agro are a few of the business that let their DRHP lapse.
DRHP is an initial prospectus submitted
ahead of an IPO, containing crucial information such as the variety of shares being provided, monetary outcomes, and danger elements, among
others.
Bankers state heightened volatility is the factor for a large number of companies not coming to the marketplace to raise money
Indian equities have actually been an outperformer in 2022, the year was characterised by sharp volatility
A great deal of offers happened in spite of volatility
There was just one IPO in February
In June and July, no issue happened
In an unpredictable environment, you can not release a big IPO
Offers take some time to hit the markets
It takes a minimum of seven to 9 months, says Dharmesh Mehta, handling director (MD) and president, DAM Capital Advisors.
A mix of aspects,
such as interest rate hikes by significant reserve banks, weakness in the rupee, fears of international economic downturn, and a spike in
product costs, kept financiers on tenterhooks and weighed on deal-making this year.
Foreign portfolio investors (FPIs) have actually been
net-sellers up until now this year
FPIs offered shares worth Rs 1.21 trillion
Bankers said the DRHPs were submitted in 2015 when the IPO market was robust and valuations benign
Bankers state promoters who had submitted their docum ¬ e ¬ nts in 2015 will have to lower their exp ¬ ectations
Additionally, some sectors are now out of favour, with financiers and companies in these sectors no longer commanding the valuations they
anticipated at the time of filing
As a result, numerous would choose to wait than sell at depressed valuations.
For a company to go public is a huge milestone
Companies want market conditions to be propitious when they launch an IPO
They would rather let approvals lapse than launch at a time when they do not get the valuations they desire, says Pranav Haldea, MD, PRIME
Database.
Lenders say next year is most likely to be turbulent for IPOs.
It will be difficult, but we will see some big deals next year
It depends on how the international market scenario is, observes Mehta.Points to Ponder
A firm has to launch its IPO within a year after
Sebis last observations
Indian equities have outperformed, 2022 saw sharp volatility
Bankers state the DRHPs were filed last year when the
IPO market was robust and valuations benign
The entire procedure of IPO takes 7 to 9 months in the past hitting the marketplace
2022 might
be a troubled one for IPOs, state bankers
