India Inc. kicks off fiscal with record $8.1 billion Q1 share sale
₹66,660.67 crore in the June quarter—the best-ever for any first quarter, Mint research showed. The amount was 29% higher than the ₹51,574.08 crore raised a year earlier from new investors. Bulk deals, qualified institutional placements (QIPs), offers for sale (OFS) and initial public offerings (IPOs) aim to raise money from new investors, unlike rights issues that are reserved for existing investors.
A majority of these funds were raised from bulk and block deals, wherein large shareholders, including promoters, divested shares amounting to at least ₹47,223 crore, up 164% compared to the ₹17,879 crore a year earlier. IPOs, OFS, and QIPs collectively contributed ₹7,779.4 crore, ₹7,258 crore, and ₹4,400.4 crore, respectively, to the total capital raised. “The sharp rise in secondary sales was driven by substantially higher foreign institutional investment (FII) flows and much stronger overall market sentiment," said Shubhrajit Roy, India head of Global Capital Markets at Bank of America.
Roy referred to FII inflows worth $13.6 billion in the June quarter of FY24 riding buoyant markets, against an outflow of $15 billion in the first quarter of FY23. Stock market benchmark Nifty50 rose 10% in the first quarter of FY24, against a 10.7% decline a year earlier. This, said Roy, sparked demand across investor buckets.
“Block deals have been active for the last one year, even when the markets were in the mid of a challenging phase," said V. Jayasankar, managing director and board member, Kotak Investment Banking. Kotak helped execute private equity giant KKR’s $1.5 billion Max Healthcare stake sale in 2022, as well as the $800-million stake sale in Kotak Mahindra Bank by Canada’s CPPIB.
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