Public equity issues mobilise over Rs 34,000 cr in 2012-13

Indian companies mobilised over Rs 34,000 crore through public equity issues in 2012-13, a sharp increase of 44 percent from the preceding fiscal.

Updated: Apr 03, 2013, 21:48 PM IST

New Delhi: Indian companies mobilised over Rs 34,000 crore through public equity issues in 2012-13, a sharp increase of 44 percent from the preceding fiscal.

According to a report by Prime Database, firms garnered a total of Rs 34,519 crore via public equity issues, including initial public offering (IPO) and Offer-for-Sale (OFS) mechanism on the stock exchanges.

This fund-raising was 44 percent higher than preceding year, when firms had mopped up Rs 23,989 crore. The last fiscal year, of course fell substantially short of Rs 52,219 crore, the highest amount that has ever been raised (in 2007-08).

"The mobilisation in the year could have been higher but for the deferment of some large PSU offerings and continuing volatility in the secondary market, through the year," Prithvi Haldia of Prime Database said.

He further said that fund raising during 2012-13 would have been much lower but for the 35 OFS done through stock exchange auction system, which only technically fall under the category of public issues.

PSUs dominated the year with a total collection of Rs 23,857 crore or 69 percent of the overall amount. This was higher than Rs 17,470 crore that had been raised by them in 2011-12.

The entire amount was through divestments as seven PSUs entered the market during the year: NTPC (Rs 11,469 crore), NMDC (Rs 5,980 crore), Oil India (3,145 crore), SAIL (1,516 crore ), Hindustan Copper (808 crore), NALCO (629 crore), and Rashtriya Chemicals & Fertilisers (310 crore).

By issues, the recent period witnessed 68 public issues compared to 32 issues last year. This included 33 IPOs and 35 OFS.

Individually, 35 OFS raised Rs 28,024 crore (81 percent of the total funds garnered), compared to Rs 18,096 crore mobilised by three companies in the preceding year.

Besides, companies have collectively raised Rs 6,495 crore via IPO or 19 percent of the total amount. Also, as many as 24 issues listed on the SME platforms of NSE/BSE collectively raising only Rs 206 crore. In comparison, 34 IPOs mobilising Rs 5,893 crore in the preceding year.

Excluding the 35 offers for sale, the average deal size fell to just Rs 197 crore from Rs 299 crore in the preceding year.The largest IPO of the year was from Bharti Infratel raking in Rs 4,173 crore.

Only 14 percent or Rs 4,913 crore was raised during the year through fresh capital, which typically goes into creation of productive assets, with the remaining Rs 29,606 crore raised through offers for sale where the proceeds go to the sellers like promoters, venture funds and other investors and not to the company.

In terms of method of offering, 12 of the 68 issues of the year, as per PRIME, were through the book-building route (Rs 6,339 crore) with 21 small issues through the fixed price method (Rs 156 crore), and 35 through the auction method (Rs 28,024 crore).

The facility of anchor investors was used by 8 companies, who on the whole, were allotted 31 per cent of the amount reserved for the QIBs.

According to Haldea, ASBA failed to make its mark even in 2012-13. Despite 6 years in operation, only about 35 per cent of applications of retail investors came through this route.

The response from the public to the equity issues of the year was on the whole very moderate, Haldea said.

Only two issues were oversubscribed by more than 3 times. The highest over-subscription was received by CARE at 34 times, followed by PC Jeweller at 6 times.

At the other extreme were 3 IPOs that failed to elicit response from the public and had to be withdrawn.