Primary attraction

CY15 will probably go down in the history of Indian markets as a year of great contrasts. While the secondary market ended in the red as foreign investors turned jittery, 2015 saw the primary market raising a record Rs.68,608 crore. This is the second-highest issuance figure since CY10, when the Street had mopped up over Rs.97,000 crore. A substantial chunk of the amount came from two big PSU divestments: Coal India in January (Rs.22,558 crore) and Indian Oil in August (Rs.9,396 crore). Additionally, 21 companies raised a collective Rs.13,600 crore, with the largest IPO, by Interglobe Aviation, garnering Rs.3,017 crore. Curiously, several companies that hit the market saw exits by PE and venture funds. Of the 21 IPOs, 11 issues comprised offers for sale from the investors at Rs.1,937 crore, accounting for 14% of the total. Also, 19 of these companies had anchor investors, which collectively subscribed to 30% of the total public issue amount. 

Domestic institutional investors also played a significant role as anchor investors, with their subscription amounting to 13% of the amount compared with 16% from FIIs. The response from retail investors was robust as well. But, more importantly, of the Rs.68,608 crore, the amount raised through fresh capital was only Rs.25,964 crore, with the balance comprising offers for sale. As of January, 20 companies looking to raise over Rs.7,000 crore and another 11 seeking over Rs.5,400 crore are awaiting SEBI approval. But with the sentiment on the Street turning from bad to worse, a repeat of last year is highly unlikely.