Initial Public Offer fund-raising declined by 32 per cent in the first half of the current fiscal to Rs 35,456 crore by 14 main-board issues
The Indian rupee weakened by 37 paise to hit a new all-time closing low of 81.90 against the US dollar on Wednesday as the greenback strengthened against major global currencies. At the interbank foreign exchange market, the Indian rupee slipped below the 82-level for the first time against the US dollar. The Indian rupee has weakened sharply in recent days largely due to a strengthening of the US dollar.
For the record, the US Federal Reserve had raised the repo rate by 75 basis points — which is the third consecutive hike of the same magnitude, in line with expectations, which essentially means that investors will move towards the US markets for better and stable returns amid the monetary policy tightening. The Fed also hinted that more rate hikes were coming and that these rates would stay elevated until 2024.
There has also been weakness in the equities markets. The Indian stock market’s key indices, Sensex and Nifty, slumped for the sixth consecutive session on Wednesday dragged by heavy selling pressure in the index heavyweights Reliance Industries, ITC and HDFC Bank.
The benchmark indices on Indian equity markets closed flat on Thursday, due to the selling pressure prevalent in global markets. The S&P BSE ended 0.33 per cent lower at 56,409 level, 188 points down from the previous session while Nifty50 closed at 16,818, down 41 points. During the early trade, the indices snapped the six-day losing streak and opened higher on Thursday, however, the indices took a U-turn and reversed gains.
RBI is expected to hike its policy rate by 50 basis points for the third time in a row as the rupee’s plunge to a record low complicates the battle against inflation.
The Bank of England’s decision to buy long-dated British bonds prompted a pullback in Treasury yields and the dollar index. The local currency closed at 81.94 versus dollar on Wednesday.
Sugandha Sachdeva, vice-president for commodity and currency research, Religare Broking, said most of the Asian currencies, including the local unit, are reeling under pressure amid the monetary tightening campaign in the West and concerns about a global economic slowdown. Limited intervention by the RBI amid declining forex reserves is also leading to the current bout of selling spree witnessed in the Indian rupee.
Meanwhile, it has been revealed that just 14 companies raised Rs 35,456 crore through main-board primary share sales in the first half of the fiscal, down 32 per cent from the year-ago period when 25 issues had mopped up Rs 51,979 crore.
But according to Prime Database, the IPO pipeline is strong with 71 issues worth Rs 1,05,000 crore having Sebi approvals and another 43 worth about Rs 70,000 crore are awaiting approval. Of these 114 planned issues, 10 are new-age tech companies, which are looking to raise roughly Rs 35,000 crore.
The overall collection would have been much lower had it not been for the Rs 20,557-crore LIC issue, which constitutes as much as 58 per cent of the total amount raised during the first half of the year, as per Prime Database.
IPO (initial public offer) fund-raising declined by 32 per cent in the first half of the current fiscal to Rs 35,456 crore by 14 main-board issues, down from Rs 51,979 crore raised through 25 IPOs in the corresponding period of FY22. Of the total, as much as Rs 20,557 crore or 58 per cent was raised just from the LIC issue, Pranav Haldea, the managing director of Prime Database Group, said in a note on Thursday.
The overall public equity fundraising also dropped by 55 per cent to Rs 41,919 crore from Rs 92,191 crore during the period, he added.
While the LIC issue was the largest ever in the country at Rs 20,557 crore, this was followed by Delhivery (Rs 5,235 crore) and Rainbow Children’s (Rs 1,581 crore). Only one of the 14 IPOs (Delhivery) was from a new-age technology company, clearly indicating the slowdown of issues from this sector after the disastrous issues from Paytm and a few others.
Meanwhile, SME issues saw a huge increase in the first half with 62 issues collecting a total of Rs 1,078 crore, up from 30 issues collecting Rs 346 crore in the year-ago period.