Two more companies — Tristar Retail (R25 crore) and Shirdi Industries (R125 crore) — have their approvals valid to launch IPOs until next week; however, experts say these issues may not be able to successfully go through. Tristar’s approval will lapse on December 20 whereas Shirdi Industries has time until December 23, data show.
Capital market experts said the lack of depth in secondary equity markets is the foremost reason for the poor performance of IPOs. Weak economic conditions, lack of progress on policy reforms and structural issues with India's economy have seen the market trade in a narrow range and, as a result, led to a decline in investors' confidence.
Interestingly, the amount lost by these 27 companies is far higher than the capital raised by companies via IPOs this year. As many as 35 companies successfully launched their IPOs so far in CY13, cumulatively raising worth R1,061.75 crore, data show. Some notable companies that launched their IPOs in 2013 include Just Dial (R940 crore) and Repco Home Finance (R270 crore).
The number of companies withdrawing their public issue was even higher in the previous two years. As many as 40 companies — with paper worth R10,370 crore — failed to launch their IPOs in 2012 whereas IPOs of 31 companies (cumulatively worth R40,150 crore) failed to take off in 2011.