“As public capital raising outside of the IPO remains low and retail / mutual fund flows are strong, absorbing this role is unlikely to be a challenge,” Credit Suisse said. “The portion of these funds with no offer to sell could help offset the erosion of venture capital during lockdowns and help jump-start growth.”
The Swiss brokerage said the next public issues could be largely in the discretionary and financial segments.
The IPOs have helped raise $ 9.7 billion (Rs 72,755 crore) this year, the second highest fundraising in a calendar year, with five months still to go and draft prospectuses being submitted for $ 12. billion (Rs 89,000 crore). These IPOs have added $ 50 billion (Rs 3.71 lakh crore) to India’s market capitalization.
The high number of IPOs is offsetting weakness in rated institutional placements and entitlement issues, Credit Suisse said.
The brokerage said private equity fundraising hit a record $ 18.6 billion in the first half of 2021. Public market activity has been delayed again this year, but IPOs are on track for a record year, it said. .
The brokerage said that fundraising in recent years has been dominated by financial firms.
“While this may have a multiplier effect on growth, as banks and non-bank finance companies leverage themselves to provide capital, this has so far only served to reduce leverage in finance or replenish damaged capital bases. for bad loans from the last cycle, “he said. Credit Suisse.
Funds raised by nonfinancial companies can affect gross domestic product in the short term, triggering investment and consumption, he said.