Q4 2021 – Best Quarter for IPO

IPOs flying high in 2021

The best March quarter is seen for IPO fund raising since 2018 as companies mop up ₹18,803 crore. This Q4 for IPO is one of the highest counts of mainboard IPOs in a single quarter.

What is IPO?

The initial public offering is a system through which the company raises required amount for its expansion, working capital etc. or gets listed on the bourses to give an exit route or allows partial offloading of shares by existing shareholders.

Booming Q4 for IPO

The IPO market continued to boom in the first quarter of calendar 2021 as 17 companies closed initial public offerings to raise ₹18,800 crore, the highest since the same period in 2018. The March quarter of 2018 saw 14 IPOs that raised a total of ₹19,275 crore. This quarter is also remembered for the beginning of southward journey in the broader space after a stellar run of around 48 percent in BSE Midcap and 60 percent in BSE Smallcap indices in 2017.

“As seen in the past, liquidity tailwind had led to a mad rush of IPOs and other capital raising initiatives by companies. Given the availability of ample money at lower cost, we will continue to see higher public issuance in the coming financial year,” Poonam Tandon, CIO at IndiaFirst Life Insurance Company.

The mood in the primary market was also boosted by bullish sentiment in the secondary market. The market continued to be at record highs until the middle of February after which it consolidated within a 1,000-1,200 range of Nifty. Overall, benchmark indices gained about 3.5 percent through the quarter but the broader markets outpaced them with the BSE Midcap index gaining 12.5 percent and Smallcap index rising 14 percent in March quarter.

Fund raising via IPOs in March quarter 2021

The March quarter started with the IPO of Indian Railway Finance Corporation, a finance subsidiary of Indian Railways, which raised ₹4,633.38 crore the highest by a single company in the quarter.

Brookfield India Real Estate Trust, the India’s only institutionally managed public commercial real estate company sponsored by an affiliate of Brookfield Asset Management, raised by second-highest amount of ₹3,800 crore.

Indigo Paints, Home First Finance Company India and Kalyan Jewellers were at the third spot in terms of fund raising as they raised more than Rs 1,150 crore each through their public offers in March quarter.

Among others, Stove Kraft, RailTel Corporation of India, Heranba Industries, MTAR Technologies, Easy Trip Planners, Anupam Rasayan India, Craftsman Automation, Laxmi Organic Industries, Kalyan Jewellers India, Nazara Technologies, Suryoday Small Finance Bank and Barbeque Nation Hospitality garnered in the range of ₹400 crore to ₹800 crore. Also, check the IPOs to watch for in 2021

The smallest among main board IPOs was Nureca, a healthcare and wellness products distributor, which mopped up ₹100 crore through its public offer.

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