Maiden share-offers halve this year

Written by Markets Bureau | Mumbai, Jun 9 | Updated: Jun 11 2008, 04:09am hrs
Due to the adverse market condition for the last few months, there has been a drastic decline in number of initial public offering (IPO) in the past five months as compared to the same period in the two preceding years. In five months from January to May, 24 IPOs were listed on the National Stock Exchange (NSE). As many as 42 IPOs were listed in 2007 and 40 in 2006 for the corresponding months.

Analyst believe there might be some more corrections in the markets and once the government is able to control the inflation rate, there might be again an upward trend in the market. Sharad Rathi, head of marketing and origination at the investment banking division of Almondz Global Securities Ltd, said, "There has been no major IPOs in the past few months due to unstable market conditions, high inflation and crude oil price going high in the international markets. Due to the poor market response, there are four large and two medium IPOs which were withdrawn."

He added, "In the last few months, due to unbalanced market conditions, it has been seen that despite all the procedures cleared by Securities and Exchange Board of India (Sebi) to launch an IPO, there are many companies which are waiting to launch it. I feel that it will take a few more months for the markets to stable down." During the uneven market in the last few weeks, companies preferred to invest in debts rather then equities, analysts say.

Investment bankers believe that the mid-cap segment is providing good response from retail investors. As recently launched IPO such as Anu Laboratories Ltd and Gokul Refoils and Solvent Ltd were listed and both the companies have got a good response from retail investors.

B Madhuprasad, vice-chairman of Keynote Corporate Services Ltd, said, "The decline in the number of IPOs is only because small investors were worried about the market conditions and they did not enter the market. I think that this unstable market will remain for another two months. Only when there will be a good monsoon, markets may see some growth."

The major IPOs, which were launched in 2008, were Future Capital Holding Ltd, Reliance Power Ltd, Gammon Infrastructure Projects Ltd, GSS America Infotech Ltd and Onmobile global Ltd.