IPO fundraising halves Rs 59,412 Cr in 2022 despite LIC’s mega bid

Fundraising via initial public offering (IPO) halved to Rs.59,412 crore in 2022 from Rs.1.18 trillion in the previous year. If the state-owned Life Insurance Corporation’s offer of Rs.21,008 crore were scrapped, the amount would be a third of the amount raised in 2021. The top five spends accounted for 60 percent of total fundraising. The turbulence on the markets was cited as the reason for the decline in the IPO market. Although Indian equities were an outperformer in 2022, the year was characterized by high volatility. A combination of strong local investor participation and global liquidity supported robust fundraising in 2021. However, drying up of liquidity abroad due to aggressive monetary policy action by the US Federal Reserve impacted the IPO clean-up in 2022 and post-listing performance who celebrated their market debut. The BSE IPO Index, a measure of newly listed companies, fell 28.3 percent. The unsatisfactory performance of the newly listed shares prompted Sebi to ask companies to disclose details of the prices for the IPO. The outlook for next year looks bleak as global headwinds are likely to cause companies to shy away from the primary market.