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Fund raising via IPO slumps 53% to Rs 12,470 crore in Apr-Sep FY19

Monday, October 08, 2018

Indian companies raised Rs 12,470 crore through initial public offerings in April-September this fiscal, a plunge of 53% from the year-ago period, mainly due to volatile equity markets and uncertainties in macro environment.

Some analysts believe that the IPO market for the second half of the ongoing financial year will be poor as the secondary market would continue to be choppy on account of high crude price, depreciating rupee and tariff war between US and China.

However, others are of the view that concerns related to IPO market may be over-rated as the underlying consumption demand continues to remain buoyant.

According to the latest data compiled from stock exchanges, 10 companies garnered Rs 12,470 cr through their respective IPOs in April-Sept of the current fiscal, much lower than a record Rs 26,720 cr raised by 19 firms in the year-ago period. In the first half of 2016-17, 15 companies had raked in Rs 16,535 cr through the route.

Proceeds of the initial public offer (IPO) were used to fund business expansion plans, pay debt, meet working capital requirements and for other general corporate purposes. By taking the IPO route, companies achieved the benefits of listing as well as enhanced their brand name and provided liquidity to the existing shareholders. During the period under review, Dinesh Engineers withdrew its IPO on weak equity market sentiments.

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