Country sees 10 IPOs in Mar quarter; median deal size just USD 1 mn

The country saw 10 initial public offerings worth USD 1.41 billion in the first three months of this year but the median deal size was just USD 1 million, according to a report. SBI Cards and Payments' share sale alone accounted for USD 1.4 billion mop-up.

Consultancy EY on Thursday said consumer products and retail were the most active sectors with three IPOs launched on SME markets with an approximate size of USD 1 million each.

"India recorded 10 IPOs (USD 1.41 billion proceeds and USD 1 million median deal size) in the first quarter of 2020 with Indian stock exchanges (BSE and NSE including SMEs) ranking eighth globally in terms of number of IPOs," it said.

During the first quarter, the IPO (initial public offering) of SBI Cards and Payments was also the biggest in over two years. The issue size was USD 1.4 billion and the issue was subscribed over 22 times.

In the main markets -- the NSE and the BSE, there was one IPO in the first quarter versus five each in the first quarter and fourth quarter of 2019, representing a significant drop of 80 per cent, the report said.

"In the SME markets, there were nine IPOs in Q1 2020 versus 15 IPOs and 6 IPOs in Q1 2019 and Q4 2019 respectively, representing a significant drop of 40 per cent as compared to Q1 2019 and increase of 50 per cent over Q4 2019, respectively," it noted.

Sandip Khetan, partner and national leader (financial accounting advisory services), EY India, said the coronavirus pandemic continues to impact livelihoods and economies worldwide, creating uncertain times.

"Indian capital markets have experienced significant erosion of market capitalisation, and companies will take time to recover. While this may present a viable long-term investment opportunity, caution is being observed in the short-term.

"Sectors like life sciences, pharmaceuticals and digital are likely to revive sooner in the current economic climate," he said. RAM HRS