Indian Companies Boost Fundraising Through IPOs and Debt in September 2024
In recent times, Indian companies have been actively raising funds by going public. A report from the National Stocks Exchange (NSE) highlights a significant increase in funds raised through Initial Public Offerings (IPOs). The share of funds from fresh IPO listings has grown from 37% in FY22 to 52% in FY25, indicating a shift towards new equities rather than existing shareholder sales.
Overall, equity and debt fundraising saw a substantial boost, reaching Rs 1.85 lakh crore in September 2024. Mainboard IPOs raised Rs 14,825 crore, with fresh equity issuance accounting for 54% of this amount. In contrast, April saw only Rs 5055 crore raised through fresh listings.
For small and medium-sized enterprises (SMEs), the NSE EMERGE platform reported an 81% increase in capital raised through IPOs, reaching Rs 1,194 crore in September, with 95% from new equity issuances. Other equity fundraising methods like follow-on public offerings, rights issues, and qualified institutional placements also saw a 50% increase, totaling Rs 23,993 crore.
Debt markets experienced a 27.4% rise in issuance, reaching Rs 1.37 lakh crore in September. This trend shows a strong demand for new capital to support company growth and a keen interest from investors in varied investment opportunities.
Doubts Revealed
IPOs -: IPO stands for Initial Public Offering. It’s when a company sells its shares to the public for the first time to raise money.
Equity Issuance -: Equity issuance is when a company sells new shares to investors to raise money. It’s like selling a piece of the company to get funds.
Debt -: Debt in this context means borrowing money that the company will have to pay back later, usually with interest.
Rs 1.85 lakh crore -: Rs 1.85 lakh crore is a way to express a large amount of money in India. One lakh crore is equal to 1 trillion, so this is a very big number.
Mainboard IPOs -: Mainboard IPOs are the initial public offerings of larger, more established companies on the main stock exchange.
SME IPOs -: SME IPOs are for smaller companies, known as Small and Medium Enterprises, that are raising money by selling shares.
NSE EMERGE -: NSE EMERGE is a platform on the National Stock Exchange of India where smaller companies can list their shares to raise money.
