Is FY22 the best year for IPO mart? Zerodha founder shares some interesting data

In the current week itself, as many as six fresh equity issues are scheduled to be active. There are two scheduled next week as well. Moreover, there are also some debt issues in the fray, giving investors ample options to choose from. This has been a trend all through the year. Hardly any week has gone by when there were no fresh issues.

But, if you think this is the height of activity in the IPO market, maybe you were born too late. Data shows this still does not compare to the frenzy over fresh issues in the 90s, when for some years there were three fresh issues opening every day!

The craze was so much and people were so willing to buy anything that legendary comedian Jaspal Bhatti created a hilarious sketch where he advised a couple of innocent streetside golgappa walas to launch their own IPO by name of PP Waterballs.

Zerodha’s CEO Nithin Kamath on Wednesday shared insight on the craze in the 90s and compared that to the current frenzy. The data accessed from Prime Database and shared by him on Twitter shows that in the last 33 fiscal years, 1995-96 saw the most number of new companies entering stock markets: 1,402. A year prior 1,336 companies launched their issues.

In fact, in the five year period 1992-97, as many as 4,712 IPOs were launched, raising Rs 52,495 crore. The staggering number of IPOs during the period is about twice more than the number of companies listed on NSE today and equal to the number of stocks on BSE.

Eventually, that craze died down as the three-year period of 1997-2000 saw just 136 IPOs. The years 2001-02 and 2002-03 (during which the Ketan Parekh scam also unfolded) saw just six IPOs each, raising about Rs 1,000 crore.

In comparison, in the ongoing fiscal 2021-22, there have been just 56 fresh issues. However, they have raised an astonishing Rs 1.06 lakh crore from the market till November 30. The number is likely to go much higher given the mega issue of Life Insurance Corporation is also scheduled later this fiscal. In 2020-21 fiscal, there were 69 issues that raised nearly Rs 75,000 crore.

The outlook of the IPO market is very bright, many analysts have said. Research consultancy firm KPMG expects new age digital companies in India to raise about $10 billion (approx Rs 75,000 crore) through IPOs in the next six months. Add to it those from the traditional businesses, the number will grow manifold.