Mumbai: With just over three months to go for the year-end, only 11 companies have hit the capital markets so far in 2019 garnering over Rs 10,000 crore through initial share sales, much lower than 24 firms raising Rs 30,959 crore in entire 2018.
The initial public offering (IPO) market is expected to remain challenging for the next few months as well due to volatility in markets on account of global and domestic factors, marketmen said.
"The IPO market will continue to remain tough during the year. There has been steep correction in valuation of mid and small cap stocks, which deters the primary market," Reliance Securities Head of Research Naveen Kulkarni said.
So far this year, 11 firms have gone public collecting a total of Rs 10,300 crore through IPOs, as compared to 24 companies that raised Rs 30,959 crore in entire 2018, data available with the stock exchanges showed. In 2017, as many as 36 firms mopped-up a record amount of over Rs 68,000 crore through initial share-sales.
The funds have been raised for business expansion plans, loan repayments and working capital, while a large amount raised from IPOs also went to the promoters, private equity firms and other existing shareholders for part or full sale of their stakes.
Market experts attributed the lower fund raising through IPOs to several factors, including trade war between the US and China, poor market sentiments and depreciating Indian currency.