BofA Sec expects larger IPOs, more QIPs this year
Raj Balakrishnan, MD and Co-Head of Investment Banking at BofA Securities India pointed out that while last year there were a larger number of IPOs, they were relatively small-sized.
Raj Balakrishnan, MD and Co-Head of Investment Banking at BofA Securities India expects larger initial public offerings (IPOs) this year compared to last year. He also sees the trend of fund raising via qualified institutional placement (QIPs) continuing.
He pointed out that while last year there were a larger number of IPOs, they were relatively small-sized translating, with only four trades of more than $300 million. So the total amount of funds raised through IPOs was relatively low.
"I would expect the total funds raised through IPOs this year to be significantly more than last year. Similarly, in terms of QIPs, last year was a great year as well as for block trades. And I continue to see that trend continuing this year," he said in a conversation with CNBC-TV18.
A total of 57 IPOs were launched in calendar year 2023 making it the second-best year for IPOs in a decade in terms of number of issues. The total mop-up was at over ₹49,000 crore, reports said quoting data from PRIME Database. In comparison, calendar year 2022 had only 40 IPOs that mopped up over ₹59,000 crore.
However, it must be noted that the 2022 number is skewed due to the IPO of Life Insurance Corporation of India (LIC), which at ₹21,000 crore is the country's largest ever IPO till date.
Balakrishnan is not too concerned about the recent sell-off by strategic investors, private equity funds, and long-term investors in many companies in India.
He believes investors are only looking to realise the gains they have made.
"A number of these funds have a defined life and look to exit, say, in a four to six year kind of timeframe...I think you will will see new PE and VC funds are looking to make fresh investments in India....The fact is that at this point in time for virtually any PE fund, India is a key focus area," he noted.
Since January 2023, promoters, PEs, and large shareholders have sold around $21 billion in India. Around $12 billion of these deals were done in 2023.
For more, watch the accompanying video
(Edited by : Shweta Mungre)
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