'Rs 36,253 cr raised via public equity markets in 2012'

Written by Agencies | Mumbai | Updated: Jan 2 2013, 03:27am hrs
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Helped by Offers for Sale (OFS) route, a whopping Rs 36,253 core was mobilised through public equity markets in 2012 -- more than twice the Rs 17,480 crore raised in the preceding year, according to Prime Database.

"The year could have been much better but for the deferment of several PSU offerings and the volatility in the secondary market through most of the year. The year, of course, fell substantially short of Rs 99,022 crore, the highest amount that has ever been raised (in 2010)," said Prithvi Haldea, Chairman, PRIME Database, India's premier database on primary capital markets.

PSUs dominated 2012 with a total raising of Rs 19,679 crore or 55 per cent of the total amount. This was much higher than Rs 4,578 crore that had been raised by them in 2011.

According to Prime, fund raising in 2012 was substantially achieved through the 23 Offers for Sale through Stock Exchanges (OFS), the new secondary sale method allowed by SEBI this year to help promoters of already-listed companies in complying with the minimum public shareholding requirement.

These offers accounted for as much as 66 per cent of the total amount raised. For investors, these sales are substantially risk-free as these are from already listed companies and are at a discount to the market price, said PRIME Database.

However, proceeds from such sales do not go the company but to the selling shareholders, it added.

OFS picked up in the later part of the year given SEBI's stern warnings that the compliance deadline of June 30, 2013 would not be extended, Haldea said.

Another new instrument was allowed by SEBI during the year -the IPP- primarily for the same purpose. However, only 2 companies opted for this routre - Godrej Properties and Godrej Industries, offering shares worth Rs 841 crore.

According to Haldea, the unstable climate in the country almost through the year resulted in a continuing lull in IPOs; only 25 came to the market collectively raising a meagre Rs 6,938 crore (compared to 37 IPOs in the preceding year mobilising Rs 5,966 crore).

The number of IPOs in the year would have, in fact, been much smaller but for the significant emergence of the new segment-the SME exchange platforms at BSE and NSE, which saw as many as 14 IPOs, though raising only Rs 103 crore, said PRIME.

The main boards saw only 11 IPOs raising Rs 6,835 crore, more than half of which came from the Rs 4,173 crore IPO of Bharti Infratel, being the only Rs 1,000 crore plus IPO in the year. Other interesting IPOs were from MCX and CARE.

Most significantly, 3 IPOs in the year came from the jewellery industry -PC Jewellers, Tribhuvandas Bhimji and Tara Jewels.

As per Prime, the year saw the "demise" of FPOs. While the previous year had witnessed two companies raising Rs 8,055 crore, the inefficacy of this method saw no company favouring this route, Haldea said.

According to him, the year was listless for the retail investors. While the 14 SME IPOs were not open to them, the allocation to them in the balance 11 IPOs where they could participate was very small.

In terms of number of applications, the highest that was achieved was by MCX at 4.26 lakhs. Almost all other IPOs fared badly; as many as 19 out of 25 IPOs could attract only less than 10,000 investors each, according to PRIME.

QIPs (Qualified Institutional Placements) managed to raise Rs 4,705 crore from institutional investors. No company made an IDR, Prime said.

In comparison to equity issues, the year saw much greater activity in the public bonds market. As many as 16 issues raised Rs 22,282 crore, though this was lower than 19 issues raising Rs 27,268 crore last year. This market was initially monopolised by NBFCs but towards the later part of the year, the investors also witnessed tax free bonds issuances from government companies.