India 2015: IPO activity sees sharp recovery as firms raise close to $2b

2015 proved to be a year of comeback for the IPO market with some strong debuts taking capital raising from the stock market to around $2 billion against $226 million in 2014, indicating a seven-fold growth.

The sharp recovery in public offerings comes after two years of tepid IPO activity but the market is yet to capture the peaks reached in 2010, when companies raised a whopping $5.4 billion.

In 2015, the market saw a string of intial public offers with around 21 companies getting successfully listed on the National Stock Exchange (NSE)

The companies that were listed – not including the funds raised by Alkem ($203 million) and Dr Lal Path Labs( $96 million) – raised around Rs 114.5 billion ($1.7 billion), according to data available in VCCEdge, a research platform of VCCircle.

This is more than seven times growth in volume as companies raised just under Rs 15 billion ($226 million) from all IPOs (including that from SMEs) in 2014.

The top IPO raises this year belong to companies straddling sectors from airline to coffee to healthcare.

Apart from providing access to much-needed growth capital for Indian companies, the IPO resurgence will also lift the private equity and venture capital activity as it is seen as significant exit option for this asset class which places early bets on enterprises.

“In 2015, IPOs based on successful themes were well received compared to others. Till the secondary markets really take off in a significant manner, this trend of successful responses only for the themes, which are proven successful, would continue to receive adequate responses going forward as well,” said G Chokkalingam, founder and MD, Equinomics Research and Advisory. Some of these hot bets include logistics and pharma, he added.

2015snapshot

 

On the other side, there are almost a dozen companies which are waiting for market regulator Securities & Exchange Board of India (SEBI) approval for their proposed IPOs. Some of them are facing delays owing to a tussle between promoters and investors while a few others reapplied for the IPO as they could not make the offering (in the stipulated time) due to negative response from their investors. These companies include AGS Transact Technologies, L&T Infotech, Paranjape Schemes (Construction) Ltd and SSIPL Retail Ltd (formerly Moja Shoes Ltd).

 

Following are the top seven PE & VC-backed companies that debuted on the stock exchange this year:

InterGlobe Aviation Ltd: InterGlobe Aviation which got listed on November 10, 2015, raised $473.97 million through its IPO. This was the biggest IPO in last three years. IndiGo’s parent InterGlobe Aviation’s issue got oversubscribed on its second day. Barclays Bank PLC, Kotak Mahindra Capital Company Ltd and UBS Securities India managed the issue.

Alkem Laboratories: Drug maker Alkem Laboratories Ltd, which launched its IPO recently, saw its shares fully subscribed on the second day of the offering. The company raised almost Rs 1,350 crore ($203.7 million), one of the highest funding value this year via IPO. It got listed on the BSE on December 23, 2015. Nomura, Axis Capital, JP Morgan and Edelweiss managed the issue.

Café Coffee Day: Cafe Coffee Day (CCD), country’s largest cafe chain run by Coffee Day Enterprises Ltd, got listed on November 2, 2015 at Rs 313 per share on BSE lower than its IPO price of Rs 328. The firm raised Rs 1,150 crore ($173.5 million) through the IPO which was oversubscribed 80 per cent led by qualified institutional buyers.

Kotak Mahindra Capital Co Ltd, Morgan Stanley India Co Pvt Ltd, Citigroup Global Markets India Pvt Ltd, Axis Capital Ltd, Yes Bank Ltd and Edelweiss Financial Services Ltd managed the issue.

Dr Lal Path Labs: Dr Lal Path Labs‘, a chain of diagnostic centres, IPO was also fully subscribed on second day. The diagnostics firm raised Rs 638 crore ($96.3 million) through its IPO. It got listed on December 23 at a hefty premium. Kotak Mahindra Capital and Citigroup managed the issue for Dr Lal Path Labs.

Inox Wind Ltd: Wind energy solutions provider Inox Wind was one of the early firm of this year which hit the market on April 9. It raised little over $166 million. Inox Wind’s shares oversubscribed 17.5 times. Axis Capital, DSP Merrill Lynch & Edelweiss Financial Services were the investment bankers for this IPO.

Navkar Corporation Ltd: Logistics firm Navkar Corporation made its debut on Sept 9. The issue of the company got oversubscribed 1.8 times even after a slow start on day first. Through the IPO, Navkar Corporation raised $95.7 million. Axis Capital, Edelweiss and SBI Capital managed the issue.

UFO Moviez India Ltd: PE-backed UFO Moviez India raised $93.87 million through the IPO, which was oversubscribed led by qualified institutional buyers. Axis Capital and Citigroup Global Markets were the investment bankers for the UFO Moviez.

Also Read:

India: Narayana Hrudayalaya IPO subscribed over eight times

India: Alkem Labs, Dr Lal Pathlabs IPOs fully subscribed on Day 2

India: RBL Bank raises $74m from ADB, UK’s CDC ahead of IPO

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.