Over 4.5 million IPO mandates created through UPI in May, data shows

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Mandate creation for initial public offerings (IPOs) through the Unified Payments Interface (UPI) hit a 4.5 million high in May 2022, data from the National Payments Corporations of India (NPCI) showed.

Data shows that in May 4.5 million IPO mandates were created through UPI and a record 2.4 million mandates were executed.

Last month, eight companies including Life Insurance Corporation of India (LIC) raised a total of Rs 29,500 crore through IPOs. This was the second-highest cleanup in a month after November 2021 when nine companies including Paytm had mobilized Rs 35,664 crore, according to Prime Database, a primary market tracking company.

Mandates are created when clients freeze an amount in their bank accounts for the IPO application. Mandate Execution refers to a transaction where the client has applied for an IPO and shares have been successfully allocated, after which funds are withdrawn from the applicant’s account.

LIC’s IPO saw a record 7.3 million retail filings, the highest ever for a domestic IPO, and surpassed the previous record set by Reliance Power’s 2008 IPO, when 4.8 million filings were received.

The other IPOs in May were logistics giant Delhivery, specialty chemicals maker Aether Industries, eMudhra, Paradeep Phosphates, Venue Pipes & Tubes and Prudent Corporate Advisory.

Although LIC’s IPO saw record retail filings, IPO mandates generated by UPI this month fell far short of the number recorded last July when food delivery company Zomato launched its first stock sale. A record 7.66 million IPO mandates were created through UPI this month, but only 530,000 were executed.

The IPO mandates in May also lagged behind the numbers of last November and December.

In November, fintech major Paytm hit the market with its Rs 18,300 IPO and Nykaa with its Rs 5,300 share sale. As many as 12 companies went public in December, raising a total of Rs 16,783 crore.

There has been a lull in the IPO market since December, which has weighed on mandate creation through the UPI route.

The rise in market volatility in the wake of the Russia-Ukraine war and the US Federal Reserve’s monetary tightening has stalled many companies’ IPO plans.

In May, the country’s largest lender, State Bank of India (SBI), received the maximum mandate creation of around 1.24 million, followed by HDFC Bank with 726,223, ICICI Bank with 518,390 and Axis Bank with 313,970. Rates of decline have also been more or less stable, with private sector lenders and public sector lenders posting similar rates, data released by the NPCI showed.

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