A steep 50 percent drop in funds raised through IPOs was recorded

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Investors were dismayed by the faltering sentiment


Mumbai: Fund raising through IPO-Initial Public Offerings has also seen a decline of more than 50 percent compared to the previous financial year, with the overall trend becoming pessimistic in the financial year 2022-23. More than Rs.1,11,547 crore was raised through 53 IPOs in FY 2021-22, compared to which Rs.52,116 crore was raised through 37 IPOs in FY 2022-23.

According to this figure of Prime Database, there has been a decline in fund raising through IPOs this year. In the year 2022-23, two companies, Hariom Pipe Industries and Venus Pipes, have given investors a high return of 222 percent and 111 percent respectively in IPO. India's largest IPO in this period was Life Insurance Corporation of India, but investors in this IPO suffered losses. Investors are currently losing 43 percent in LIC's IPO from the issue price.

Meanwhile, the entry of new age tech companies i.e. Internet companies in the primary market has also been inactive. Only Delhiwari entered the capital market in FY 2023. While last year in 2021-22, Paytm, Nayaka, Zomato and PolicyBazaar came up with public issues. Investors who bought shares in Delhi's IPO are losing 32 percent at current prices.

There were 37 IPOs in FY 2022-23, of which 14 IPO shares are currently trading at a discount to the issue price and 22 companies are trading above the offer price. The attraction for IPOs began to wane from the third quarter of fiscal 2023 and only good quality companies ventured into IPOs at appropriate valuations.

According to experts, companies planning to launch an IPO in the next financial year are now likely to delay the launch of the IPO while waiting for the market sentiment to improve. Companies are likely to shy away from filing DRHPs for now due to the choppy conditions and volatility in global markets.

Apart from this, capital market regulator SEBI is also taking a strict stance in approving IPOs, and the number of companies returning IPO documents for correction is also seeing a record. In the wake of the IPO debacle of Paytm-One 97 Communications, SEBI has become cautious and is very strict in document verification.

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