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The recent trend in equities shows that Indian companies are going public to raise fresh funds.
According to a report by the National Stocks Exchange (NSE), the share of funds raised through fresh IPO listings has grown significantly, climbing from 37 per cent in FY22 to 52 per cent in FY25. This trend indicates that a greater portion of funds raised via IPOs now comes from new equities rather than selling by existing shareholders. The report also highlighted that the overall fundraising through equity and debt have witnessed a substantial boost, totalling Rs 1.85 lakh crore in September 2024. It said "The share of funds raised through fresh listing as proportion of overall funds raised through IPO has been steadily rising from 37 per cent in FY22 to 52 per cent in FY25 (As on September 30th, 2024)". A closer look at the equity markets shows that funds raised through mainboard IPOs rose by 0.8 per cent month-on-month to reach Rs 14,825 crore in September. Of this fresh equity issuance accounted for 54 per cent, while the remainder came from the sale of shares by existing shareholders through the Offer for Sale (OFS) route. However, in April this year, funds raised through fresh listings was only Rs 5055 crore.On the SME front, the NSE report noted that, the capital raised through IPOs on the NSE EMERGE platform, which caters to small and medium-sized enterprises, experienced a dramatic increase of 81 per cent month-on-month. The amount raised reached an all-time high of Rs 1,194 crore in September, with 95 per cent of this capital sourced from new equity issuances. Additionally, there was strong growth in other forms of equity fundraising, with capital raised through follow-on public offerings (FPO), rights issues, preferential allotments, and qualified institutional placements (QIPs) jumping 50 per cent month-on-month to Rs 23,993 crore. Debt markets also saw a notable uptick in activity, with overall debt issuance rising 27.4 per cent month-on-month to reach Rs 1.37 lakh crore in September. September marked a robust month for fundraising, with a clear tilt towards fresh equity issuance in IPOs, especially among SMEs, and a healthy increase in debt issuance. This trend reflects a growing appetite among companies for new capital to support growth, along with strong investor interest in diverse investment opportunities. (ANI)
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