If the seven days to September 26, 2010 are tipped to be among the busiest since 1995 with nearly a dozen initial public offerings (IPOs) lined up, October could see near record levels of fund-raising of around Rs 20,000 crore. Strong appetite for Indian stocks is encouraging companies to go ahead with their issuances; should the state-owned Coal India manage to raise the Rs 14,000 crore or so that it?s looking for, some others would try their luck, say merchant bankers. Total capital expected to be raised by 11 firms this month is Rs 3,500 crore.

Interestingly, Indian IPOs have delivered among the best returns globally, third only to Hong Kong and China, in the past five years, according to Bloomberg data. While Indian IPOs have, on an average, delivered a return of 50% in the past five years, the returns were 128% and 51% for Hong Kong and China respectively. In the last seven IPOs that hit the market, investors made handsome returns in the range of 14-74%. Foreign institutional investors (FIIs) which have bought stocks worth $16 billion this calendar year, with a third of it going into the primary market.

The IPO pipeline is fairly large with close to Rs 40,000 crore expected to be raised by the government as part of disinvestments this fiscal. The government has raised around Rs 2,000 crore this fiscal by divesting stakes in SJVNL and Engineers India. Power Grid Corporation, MMTC, Hindustan Copper, Shipping Corporation of India and Manganese Ore India are among others likely to hit the market this fiscal.

?There is a strong momentum in the primary market so issues are likely to continue,? said S Ramesh, chief operating officer, investment banking, Kotak Mahindra Capital. Adds Madhabi Puri Buch, MD & CEO, ICICI Securities: ?There is enough liquidity with money flowing into Indian markets. But should there be any global uncertainty, then it could constrain investor appetite.? Vinay Menon, executive director and head of capital markets, JPMorgan believes that while smaller issues wouldn?t impact secondary markets, a large issue like CIL though could affect liquidity, albeit marginally.