IPO filings decline nearly 54% in FY23 amid market turbulence

Only 66 companies filed offer documents with the capital market regulator– the Securities Board of India (SEBI) in FY23 as opposed to 144 companies in FY22.

The reason behind the decline in IPO filing, according to research, could be attributed to the prevailing volatility in the market, Pic- Pixabay

The Initial Public Offering (IPO) filings in FY23 more than halved as compared to FY22. According to a Zee Business research, draft red herring prospectus (DRHP) – a document prepared by the merchant bankers as a preliminary registration document for companies looking to float an IPO, filing declined by 54.2 per cent as compared to the preceding year.

Only 66 companies filed offer documents with the capital market regulator– the Securities Board of India (SEBI) in FY23 as opposed to 144 companies in FY22.

As the number of offer document filings slumped, 74 per cent less money was raised through IPO in FY23 when compared to last financial year. In FY23, approximately Rs 68.6 crore was raised through IPO as against Rs 2.64 trillion in FY22.

The reason behind the decline in IPO filing, according to research, could be attributed to the prevailing volatility in the market due to the global recession and continuous interest rate hikes.

Notably, the Nifty50 index has declined more than 6 per cent so far in 2023. In contrast, the market largely moved upward in FY22, gaining nearly 19 per cent, the research showed.

On a positive note, even though the number of filings was reduced in FY23 in comparison to the previous year, the third-highest DRHP was filed in FY23 in the last 11 years.

Year DRHP filings	DRHP filings
FY23	66
FY22	144
FY21	30
FY20	29
FY19	64
FY18	67
FY17	35
FY16	41
FY15	29
FY14	10
FY13	18

Meanwhile, the two-month drought in the IPO market ended this week with Divgi TorqTransfer Systems making its stock market debut. The shares of Divgi TorqTransfer made a decent debut on March 14, listing at a premium of 5 per cent on BSE.

As many as 8 more companies were planning to launch IPOs in the coming weeks. According to a report by Zee Business channel, these 9 companies including Divgi TorqTransfer will seek to raise approximately Rs 17,000 crore from the primary market.

Also Read: Upcoming IPOs: Mankind Pharma, Utkarsh SFB, Signature Global among 9 companies to raise Rs 17,000 crore from primary market

Upcoming Company IPOs	Tentative Issue Size (In Cr) (Rs)
Mankind Pharma	5000
Nexus Malls REIT	4000
TVS Logistics	4000
Signature Global	1000
Avalon Technologies	850
Capillary Technologies	850
Divgi TorqTransfer Systems	500
Utkarsh Small Finance Bank	500
Cogent Systems	350