Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the strong initial public offering (IPO) issuances in FY22 in the Indian buoyant stock market bode well with the country’s economic recovery.
According to the report, equity raising by entities will not have a meaningful impact on their debt levels, as the objective of raising funds is largely to do with unlocking the value proposition rather than creating new investments. Overall issuances have reached a significant level after FY18 in terms of issue size, with four months still left in the financial year.
Credit rating agency further noted that enormous worldwide liquidity owing to the culmination of fiscal and monetary expansion, strong investor appetite, favourable financial market conditions and a sharp recovery in business conditions have uplifted the IPO market in FY22.
Besides, Ind-Ra said that few auto component players have also resorted to IPO issuances in FY22 after a consecutive five years of absence, to fund working capital requirements and repayment of borrowings. It said that within healthcare industry, major issues have been undertaken so as to take up capex activities and reduce borrowings.
