Deferment of issues fail to deter IPO mobilisation

Written by Markets Bureau | Mumbai, Apr 10 | Updated: Apr 12 2008, 04:08am hrs
Money mobilised in the recently ended fiscal year 2007-08 has posted a rise of 109%, as compared to funds raised in the previous fiscal year. According to Prime database, Rs 52,253 crore was mobilised as compared to Rs 24,994 crore, which was raised in the preceding fiscal year, while Rs 23,676 crore was raised in the fiscal year 2005-06.

According to PRIME, the mobilisation was dominated by 85 initial public offers (IPOs), which collectively raised Rs 41,358 crore or 79% of the total amount, compared to 76 IPOs in the preceding year, which mobilised Rs 23,706 crore. Follow-on public offerings (FPOs) by listed companies too witnessed an increase. Compared to 9 such companies with a total offer of Rs 1,287 crore in the preceding year, the year 2007-08 witnessed 6 listed companies raising Rs 10,895 crore. The largest FPO during the year was from ICICI Bank (Rs 10,044 crore).

However, according to Prithvi Haldea, managing director, PRIME Database, the mobilisation in the year could have been higher but for the two secondary market crashes during the year, which forced the deferment of IPOs and also due to lack of PSU divestments.

Haldea added, Quality continued to be the hallmark of the years offerings. The quality factor was evident through the near-domination of existing companies, in most cases with well-known promoters. Clearly, there was no market for IPOs from greenfield projects or from new promoters - some thing that had dominated all past primary market booms.