Capitalising on a market revival, the 2010 year saw Indian companies raising nearly Rs 59,000 crore (US$13 billion) from IPOs and the total mop-up from initial offerings is expected to touch Rs 90,000 crore in the coming year, says a study.
According to a report by SMC Global Securities Limited, Indian companies, both public and private,have collected about Rs 59,523 crore from the primary market so far this year.
In 2009 only 20 companies raised close to Rs 20,000 crore from initial public offers.
The report added that the pipeline is indicating a total public issue volume of about Rs 90,000 crore during 2011. “…Rs 50,000 crore from private sector and Rs 40,000 crore from public sector,” SMC Global Securities Strategist & head of research Jagannadham Thunuguntla said.
As per the prospectuses filed by private companies with the market regulator Sebi, there are 100 public issues in the pipeline with an indicative IPO size of about Rs 50,000 crore.
Of this, about 35 have already got the Securities and Exchange Board of India (SEBI)'s nod and are waiting to open the issue. The indicative size of these 35 issues is about Rs 35,000 crore, he added. Rest 65 issues worth Rs 15,000 crore are waiting for the Sebi clearance, the report added.
Besides, initial public offerings of state-owned companies would hit the market next year as a part of the government's plan to mop-up Rs 40,000 crore in 2010-2011 fiscal through disinvestment in PSUs.
Analysts are of the view that revival of the primary market boosted investor confidence and expect that this momentum will continue in the coming year as well.
This calender year the government diluted stake in nine companies, including largest coal producer Coal India Limited's IPO.
With an issue size exceeding Rs 15,000 crore, the CIL IPO made history as the largest public issue of all time in the Indian capital market.
Also, follow-on public offers of National Mineral Development Corporation and Power Grid Corporation of India Ltd recieved an overwhelming response of investors.
Source: Trading Markets