IPO space eyes massive Rs 10,000 cr mark. Will it succeed?

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Published: June 22, 2016 6:05:56 AM

After two months of lull, activity in primary markets has started to pick up as five initial public offerings (IPOs) with a combined value of more than `5,000 crore are set to hit markets in the next one month.

MAHANAGAR GAS IPOPrivate lender RBL is expected to launch its `2,000 crore IPO in the last week of June as the bank has finally received a nod from Sebi after its draft prospectus of RBL was kept in abeyance for more than three months due to past violations.The transactions under scanner were the two rights issues the bank made previously. (Reuters)

After two months of lull, activity in primary markets has started to pick up as five initial public offerings (IPOs) with a combined value of more than `5,000 crore are set to hit markets in the next one month. While the public offering of Mahanagar Gas has already opened, Quess Corp will launch its initial share sale during next week. Ratnakar Bank(RBL), L&T Infotech and Advanced Enzyme are also likely to announce their public offering by mid-July.

If these public offerings manage to sail through, the total fund raising via IPO route in CY16 would cross `10,000-crore mark. In 2016 so far, ten companies have tapped primary markets to raise `6,743.69 crore, Prime Database showed.

Apart from these, there are more than 10 companies including Sandhar Technologies, GNA Axles and Centre

For Sight who have received a nod from the markets regulator for an IPO and are waiting for the right time to launch their share sales.

According to Prithvi Haldea founder of Prime Database, although the pipeline looks positive a lot will depend on how stock markets perform in the next few days as both primary and secondary markets are interlinked.”The pipeline has always been good however we need to see how many of these companies actually go for an IPO. Right now in the markets, there is only demand for high quality issues that have reasonable valuations,” Haldea said.

The share sale of Mahanagar Gas, India’s second biggest CNG retailer, opened on Tuesday. The issue is a complete Offer for Sale(OFS). The company has fixed the price band of `380-421 for the IPO. At the upper price band, the company will raise `1,040 crore through the offering. Kotak Investment Banking and Citi are the book running lead managers for the issue.

Private lender RBL is expected to launch its `2,000 crore IPO in the last week of June as the bank has finally received a nod from Sebi after its draft prospectus of RBL was kept in abeyance for more than three months due to past violations.The transactions under scanner were the two rights issues the bank made previously. According to the Draft Red Herring Prospectus data, RBL allotted shares through a rights issue to 2,591 investors on February 19, 2003, and to 1,969 investors on March 13, 2006.The private lender provided an exit to the shareholders who participated in the rights issue via buyback route and settled the enforcement actions by consent mechanism.

L&T Infotech, a subsidiary of Larsen & Toubro, is planning to launch its IPO in mid-july. The company plans to raise close to `1,500 crore through the share sale. L&T Infotech had originally planned to raise more than `2,000 crore however it subsequently cut the size of the issue by 20% and filed a fresh prospectus with the regulator. As per sources, the company had reduced the offer size on the advice of investment bankers who recommended the valuations of the company to be reduced keeping in mind current market conditions.

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