As equity fund raising gains pace, investors to remain selective

Written by fe Bureau | Mumbai | Updated: Oct 16 2014, 06:05am hrs
India Incs equity fund raising in the first six months of FY15 surged to a four-year high of Rs 25,996.75 crore, with a major chunk of money raised via private placement to institutional investors as secondary market ascent boosted investor sentiment, according to data from Prime Database, reports fe Bureau in Mumbai. Companies had raised R30,881.23 crore in FY11. Mobilisation through private placement stood at R20,589 crore, about 80% of the total money raised in H1. Reliance Communications (R4,800 crore), Idea Cellular (R3,000 crore), Yes Bank ($500 million) and Muthoot Finance (R418 crore) were some of the big issues.

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As companies fund raising pipeline remains robust, industry observers opine that institutional investors will remain selective and will only participate where they foresee sizable returns. The government, with its ambitious divestment as well as bank recapitalisation plan, and many private companies are looking to tap the capital markets in the second half, they said. For instance, an investor may prefer to invest in an Idea Cellular over RComm, after the latter shares have slid more than 28% from the QIP price of R142.13. Ditto with Jaiprakash Associatess private placement, where investors lost nearly 60% of their investments in the QIP that was priced at R73 apiece.