Half of the companies’ IPO earnings this year, there may be a decline in the next year as well

Only Rs 57,000 crore could be raised in the year 2022 through Initial Public Offering (IPO). In the new year, these activities are expected to slow down even more.

Only Rs 57,000 crore could be raised in the year 2022 through Initial Public Offering (IPO).

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Fall in share prices of listed companies and volatility due to geo-political tensions have affected sentiments in the stock market. Due to this, only Rs 57,000 crore could be raised in the year 2022 through Initial Public Offering (IPO). In the new year, these activities are expected to slow down even more. Out of the funds raised through IPO this year, Rs 20,557 crore i.e. 35 per cent stake was from LIC’s IPO alone.

LIC’s IPO collection was good

If LIC’s IPO had not come this year, the total collection from the initial share sale would have been even less. The year 2022 has been troublesome for investors due to the increase in interest rates amid rising inflation and the possibility of recession.

Nikhil Kamat, co-founder of True Beacon and Zerodha, said that 2023 is going to be a difficult year amid slowing growth across the globe. He said that its side effects will be seen in India as well. He estimates that the market may remain soft in 2023 and capital raising activities through IPOs may also decrease next year or it may remain at the level of 2022. Vinod Nair, head of research at Geojit Financial Services, said that the overall size of IPOs in 2023 is expected to be low amid fears of volatility in the stock markets. He said that the weak performance of the recent IPOs is also expected to affect investors and due to this, there will be a weak reaction in the near future.

36 companies brought IPO so far this year

According to data from Prime Database, till December 16 this year, a total of 36 companies have brought their IPOs, raising Rs 56,940 crore. IPOs of two more companies are going to come next week, after which this amount will increase further. In the year 2021, 63 companies raised Rs 1.2 lakh crore from IPOs, which was the best IPO year in the last two decades. Earlier in 2020, 15 companies raised Rs 26,611 crore through IPOs. Apart from the IPO, Rs 4,300 crore was raised in the public offering of Ruchi Soya.

Due to the outbreak of war between Russia and Ukraine in February, the environment for investors has been troubled, as the markets around the world, including India, have declined. Apart from this, central banks around the world have increased interest rates to control rising inflation. This has also affected the sentiment of the stock market. This affected the price of shares and companies postponed the plan to bring IPO.

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