Total worth of fresh paper waiting to hit the market pegged at upward of R2,500 crore.
About five companies are planning to launch their initial public offerings (IPOs) in the next one to two months hoping that secondary markets remain strong and continue to head upwards, given the belief that India’s long-term economic growth story is picking up.
Regional cable television service provider, Ortel Communication will launch its R115 crore IPO on March 2, 2015. Adlabs Entertainment, the parent company operating amusement park Imagica and Aquamagica, will launch its R500 crore IPO on March 10.
Inox Winds (upward of R1,000 crore) is planning to launch its IPO by end of March or early April, and the company is meeting potential institutional investors at roadshows currently underway in Asia, Europe and the US. PNC Infratech (R440 crore) is also looking at March-end or an April launch date.
In all, fresh paper worth R2,500-3,000 crore is waiting to hit the market in the near future, shows data from the Securities and Exchange Board of India (Sebi) as well as Prime Database.
If the companies are successful with their IPOs, March and April are likely to be busiest months for equity fund raising since December 2012 when Bharti Infratel, CARE Ratings and PC Jewellers cumulatively raised close to R7,000 crore.
Investment bankers confirmed the developments and said that there is a strong IPO pipeline building-up. Work on most IPOs started only after June as very few had expected the election mandate won by the new government.
“IPOs are certainly returning… There is a great faith in India’s macro economic growth story and investors are convinced that sentiments in the secondary markets are strong and heading in the right direction. It is certainly good to have a healthy IPO market otherwise there is too much money in the system chasing limited paper, which could lead to an asset bubble,” said V Jayasankar, senior executive director and head of equity capital markets, Kotak Investment Banking.
Three companies – RINL (R1500 crore), MEP Infra Developers (R360 crore), and Great Eastern Shipping (R300 crore) – have valid Sebi approval and can launch their IPOs within one year from the date of Sebi clearance. Sebi approval is valid for one year.
More than eleven companies have filed their prospectus with Sebi and are awaiting clearance. The amount these companies are planning to raise is pegged at R5,000 crore.
“2014 was the year of consolidation and companies in sectors like technology, pharma, infrastructure, and financial services were expanding their reach through acquisition instead of organic route. I think with the new government, which truly focused on business and economic growth, I expect more primary market deals this year… 2015 will be the return of IPOs,” said a head of a top foreign investment bank, on conditions of anonymity due to compliance reasons.