Fund collections through IPOs slump 82 per cent

45 cos refrained from bringing out their IPOs during the fiscal 2011-12

Indian companies raised a total of Rs 5,800 crore during the last fiscal 2011-12 through Initial Public Offers (IPOs) — a slump of 82 per cent from the previous year.

According to an analysis of data available with the stock exchanges, a total of 33 Indian firms together raised Rs 5,808 crore via IPO route during the fiscal ended March 31, 2012. In comparison, a total of Rs 33,183 crore worth capital was raked in by 52 firms during the fiscal 2010-11.

Interestingly, NBCC was the single state-owned firm to enter the capital market through IPO route during 2011-12. It raised about Rs 120 crore through its public offer.

Besides, two other public sector firms — Power Finance Corp (PFC) and ONGC — raised capital through follow-on public offers (FPOs) during the past fiscal. PFC and ONGC raised Rs 4,660 crore and about Rs 12,000 crore, respectively.

Among the major IPOs of the year, L&T Finance Holdings raised Rs 1,245 crore, gold loan company Muthoot Finance garnered Rs 900 crore, Future Ventures India Ltd, part of Kishore Biyani-promoted Future Group, mopped-up Rs 750 crore and commodity bourse MCX raked in Rs 663 crore.

The other IPOs that entered the market were Flexituff International, Innoventive Industries, PG Electropast, TD Power Systems, SRS Ltd, Aanjaneya Lifecare and Tree House Education & Accessories.

Further, three IPOs — Galaxy Surfactants, Swaraj Air Charters and Goodwill Hospital and Research Centre — withdrew their offers after a poor response from the market.

Moreover, as many as 45 companies refrained from bringing out their IPOs during the fiscal 2011-12 despite obtaining the go-ahead from market regulator Sebi. Together, these companies were aiming to raise Rs 33,787 crore.

The companies which let their regulatory approvals lapse during the year included Jindal Power, Sterlite Energy, BPTP, Gujarat State Petroleum Corp, Micromax and Embassy Property.

Market experts believe many companies were averse to hitting the market because of the subdued market conditions, as well as the fact that firms that did implement their public stake sale plans are trading below the issue price.

Looking ahead, SMC Global Securities Strategist and Head of Research Jagannadham Thunuguntla said, “Further, the government’s disinvestment program which was supposed to bring public issues of several blue-chip PSUs couldn’t take off. The recent lukewarm response to ONGC auction can also impact the confidence of the public issue market.”

“The secondary market and global liquidity hold key for the future of IPO market,” he added.