Several IPOs hinge on success Bharti Tele issue

Our Markets Bureau

New Delhi, Jan 2: Several mega initial public offers (IPO) may hit the market this year if the investors embrace the much-hyped Bharti Tele-Ventures’ Rs 1200-1800 crore public issue, according to PRIME, the Delhi-based primary market database.

This includes prized companies like Tata Consultancy Services, NDTV, I-Flex Solutions, AB Corporation, B4U, Coke, Kuoni Travels and LG Electronics, among scores of other companies.

The primary market may also see several other IPOs which could not tap the public during 2001 despite obtaining Sebi approval, according to PRIME. These include Applitech Solutions, Godrej Sara Lee, Paras Pharmaceuticals, Nimbus Communications, Datamatics, UTV Software, Future Software and Manipal Media Networks. Banks like Bank of Maharashtra, Canara Bank, Central Bank of India, Lord Krishna Bank, Punjab & Sind Bank and Punjab National Bank may also follow suit.

PRIME managing director Prithvi Haldea suggests that divestment through the primary market is probably the most appropriate measure that can infuse life into the moribund IPO market. Lack of IPOs over the last five years has made secondary markets very narrow and speculative.

In order to increase the supply of good paper, which will also bring back investors, the disinvestment targets should at least partly be met through small offerings by blue-chip public sector units to the retail investors at attractive prices, thereby in some way bringing back the FERA-dilution like days, Mr Haldea explains. This would also enable better price discovery for these PSUs for eventual sale to strategic investors and would be free from all controversies, he says.

The calender 2001 was a write-off as far as IPOs are concerned with a mobilisation of a paltry Rs 392 crore, reminiscent of the equally disastrous 1998 which had seen a raising of Rs 314 crore, according to PRIME. The year represented a significant decline of more than 82 per cent over Rs 2165 crore mobilised in 2000. In terms of investor response, almost all IPOs failed to generate interest. In fact, the IPOs of Globsyn Technologies and Ador Powertron had to refund the application money having failed to mobilise the minimum 90 per cent subscription.