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Fresh Issues vs Offer for Sale: Understanding 2024 IPO Fundraising
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4 min read | Updated on November 20, 2024, 10:19 IST
SUMMARY
So far in 2024, the IPO boom has registered ₹1.22 lakh crore fundraising, a jump of 129% than 2023. Companies like Hyundai raised ₹27,870 crore with complete offer for sale (OFS), while Juniper Hotels raised ₹1800 crore with fresh issue, Mixed models of fresh issue and offer for sale were among IPOs such as Swiggy, Ola Electric and Bajaj Housing.
An overview fundraising model of IPO in 2024 - fresh issue vs offer for sale vs mixed
In 2024, Indian capital markets witnessed a significant IPO boom, with 72 companies raising ₹1,21,747 crore through main board IPOs to date, a 129% higher than the ₹53,016 crore mobilised by 31 IPOs in 2023. Of this, ₹46,864 crore was raised through fresh issue, which involves issuing new shares to increase the company’s capital. While ₹74,883.16 crore came from an offer for sale (OFS), which involves existing shareholders selling their shares without raising new capital for the company.
Among the 72 IPOs, 49 followed a mixed fundraising model, combining fresh issues and Offer For Sale, collectively raising ₹78,184.5 crore, Swiggy through its ₹11,327 crore IPO, which comprised ₹4,499 crore from fresh issue and ₹6,828 crore through offer for sale. Companies such as Bajaj Housing Finance, and Ola Electric also went with the same model.
15 IPOs exclusively raised funds through fresh issue, with Juniper Hotels raising the most ₹1,800 crore, along with Jyoti CNC Automation, Bansal Wire Industries, Rashi Peripherals, and Arkade Developers also following the steps. On the other hand, 8 IPOs were entirely offered for sale with Hyundai Motor India’s IPO of ₹27,870.16 crore being the largest. Others included Bharti Hexacom, Sagility India, Medi Assist Healthcare and Gopal Snacks.
Top five IPOs with 100% Offer for Sale in 2024
| Issuer Company | Issue Size (₹ crore) | Offer for Sale (₹ crore) | Listing Gain | Subscription (X) |
|---|---|---|---|---|
| Hyundai Motor India IPO | 27,870.16 | 27,870.16 | -1.48% | 2.37 |
| Bharti Hexacom IPO | 4,275.00 | 4,275.00 | 32.49% | 29.88 |
| Sagility India IPO | 2,106.60 | 2,106.60 | 3.53% | 3.20 |
| Medi Assist Healthcare Services IPO | 1,171.58 | 1,171.58 | 11.24% | 16.25 |
| Gopal Snacks IPO | 650.00 | 650.00 | -12.72% | 9.50 |
(Source - Chittograph.com and BSE)
Top five IPOs with 100% Fresh Issue in 2024
| Issuer Company | Issue Size (₹ crore) | Fresh Issue (₹ crore) | Listing Gain | Subscription (X) |
|---|---|---|---|---|
| Juniper Hotels IPO | 1,800.00 | 1,800.00 | -0.33% | 2.18 |
| Jyoti CNC Automation IPO | 1,000.00 | 1,000.00 | 12.39% | 40.49 |
| Bansal Wire Industries IPO | 745.00 | 745.00 | 37.52% | 62.76 |
| Rashi Peripherals IPO | 600.00 | 600.00 | 7.72% | 62.95 |
| Arkade Developers IPO | 410.00 | 410.00 | 37.42% | 113.49 |
(Source - Chittograph.com and BSE)
Top five IPOs with partial fresh issue and offer for sale in 2024
| Issuer Company | Issue Size (₹ crore) | Fresh Issue (₹ crore) | OFS (₹ crore) | Listing Gain | Subscription (X) |
|---|---|---|---|---|---|
| Swiggy Limited IPO | 11,327.43 | 4,499.00 | 6,828.43 | 5.64% | 3.59 |
| Bajaj Housing Finance IPO | 6,560.00 | 3,560.00 | 3,000.00 | 114.29% | 67.43 |
| Ola Electric Mobility IPO | 6,145.56 | 5,500.00 | 645.56 | -0.01% | 4.45 |
| Afcons Infrastructure IPO | 5,430.00 | 1,250.00 | 4,180.00 | -7.12% | 2.77 |
| Waaree Energies IPO | 4,321.44 | 3,600.00 | 721.44 | 69.66% | 79.44 |
(Source - Chittograph.com and BSE) (Note - For overview of fundraising models top five IPOs based on Issue Size taken from each model)
Conclusion
The overview points out that IPOs with entirely fresh issue subscriptions such as Arkade Developers IPO (113x), Rashi Peripherals IPO (62.95x), Bansal Wire Industries IPO (62.76x), and Jyoti CNC Automation IPO (40.49x) received significant investor interest. Whereas, IPOs with an entire offer for sale (OFS) such as Bharti Hexacom IPO (29.88x), Medi Assist Healthcare Services IPO (16.25x) and others received relatively fewer subscriptions than entirely fresh issues.
However, investors should carefully evaluate the IPO model for fundraising, such as a fresh issue or offer for sale to understand where funds raised are directed i.e. towards the company or promoters, as it is key to making an informed investment decision in a diverse IPO landscape.
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