Indian firms raise Rs 1,050 cr from IPOs in H1: Prime Database

Domestic companies mopped up Rs 1,050 crore through initial public offers (IPOs) in the first six months of 2013-14, an increase of 36 per cent over the same period last fiscal even as 14 companies that intended to raise Rs 4,500 crore and had secured approved of market regulator Sebi, allowed it to lapse.

According to Prime Database, a database on primary capital market, 16 firms collectively raised Rs 1,050 crore  as against Rs 772 crore raised by 13 companies in the corresponding period of last fiscal.

Interestingly, of the 16 IPOs which hit the capital market in the first half of the current financial year, 15 were from the Small and Medium Enterprise (SME) sector.

Market experts attributed the reason for big companies avoiding the IPO route to rake in funds to an uncertain and volatile equity markets, coupled with a lack of appetite among retail investors.

Prime Database Managing Director Pranav Haldea said: "With the secondary market still being extremely volatile and (due to the) overall lack of confidence, no immediate revival of the primary market is seen in the remaining part of the year...the biggest disappointment for the primary market has again been the lack of divestment by the government."

"In the six-month period, 14 companies, intending to raise Rs 4,500 crore, which had obtained approval from Sebi allowed it to lapse. At present, only 16 companies planning to raise Rs 3,800 crore are holding Sebi approval and another 10 companies intending to raise Rs 3,100 crore have filed with Sebi and are awaiting approval," he added.

There was only one non-SME IPO (Just Dial, which garnered Rs 919 crore), which accounted for 87 per cent of the total mobilisation.

Among sectors, information technology space dominated with three firms mopping up Rs 1,927 crore, which is 29 per cent of the total amount garnered.

In terms of the method of offering, only one of the 16 IPOs of the period were through the book-building route, with the balance 15 SME issues through the fixed-price method. The facility of anchor investors was used by one company.