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: Post poll results, the domestic equity bourses have witnessed a dramatic shift in sentiment in the fund flow movements, a vital factor that drives the thriving of equity markets. Fund flows from overseas investors have picked up pace and domestic retail investors have returned to the trading ring after remaining lull for the most part of the last financial year.
With the signs of a bull market momentum returning to the secondary market of late, the key question is whether it would help in the revival of the primary market in India that got virtually dried up with investors’ risk appetite shrinking sharply.
During fiscal 2008-09, the IPO business hit the nadir, with only 21 initial public offers (IPOs) hitting the market mobilising capital of Rs 2082.35 crore when compared to Rs 54,510.54 crore raised in 2007-08, almost a drop of over 96%, over the previous year. At the same time, the debt private placement grew.
The fund mobilised through the private placement of debt during 2008-09 stood at Rs 2.07 lakh crore with 1,061 issues as compared to 921 issues raising Rs 1.28 lakh crore during 2007-08.
Though investors would wait a little more to get clear signs of stability and sentiments to flock to the primary market issues, experts say that the need of the hour is to place simplified listing norms and create pools of fund raising avenues. So when the market really picks up, there will be a hassle free environment for the domestic companies to tap the capital market along with diversified investment opportunities for the investors.
Udaybhanu Thakur, associate V-P, SREI Capital Markets Ltd, said, "The immediate measures required is to expedite whatever procedures are required to raise funds by the domestic companies. I think the market regulator is taking pro-active steps in that direction that would bring down the time frame for any public issues".
So some of the immediate measures the market is expecting from the market regulator Securities and Exchange Board of India (Sebi) in the primary market on the equity side is reducing the time frame for a public issue like IPOs, and rights issue from the current 21 days to 15 days. This would ensure that the issuer doesn't have to face the risk associated with any sudden movement in the market prices. For raising funds through the QIP, Sebi had already relaxed the price fixing norms from the previous...
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