The total funds raised through follow-on public offerings (FPOs) are to the tune of Rs 286 crore during the calendar year 2008, as against Rs 11,551 crore in 2007, representing a fall of 97.52%.
?The bearish markets and tight liquidity conditions have caused a serious drop in the fund raising activity through FPOs as well during 2008,? noted Jagannadham Thunuguntla, equity head at SMC Capital.
He added that this has also impacted the average FPO size to drop from Rs 1,925 crore in 2007 to Rs 142 crore in 2008.
?This year 2009 is yet to see listing of any FPO. As the Indian corporates are finding raising funds through QIPs is a quick route due to lack of much regulatory approval requirements, the recovery in FPO market may take some time,? he said.
Of all the FPOs that have taken place between 2006 and 2009 year-to-date (YTD), 83% of FPOs are from the banking industry, noted Thunuguntla. ICICI Bank?s FPO of 2006 works out to 64% of all the FPOs happened between 2006 and 2009 YTD.