IPOs focus on giving exit route for PEs, not capital expansion
ments, in line with the US’s ‘Buy American’ policy.
DGS&D currently has four regional offices, 12 purchase directorates and 20 quality assurance sub-centres. In total, DGS&D has 1,235 officers, including 61 supply wing and 107 inspection wing officers.
In 1860, the British government set up India Stores Department in London under a concept of centralised buying to meet procurement needs of the government of India, which later turned into the DGS&D.
GeM acts as a public procurement platform between suppliers and buyers, by providing them a common, unified, and transparent Government to Business (G2B) portal for supply and procurement of goods and services registered with GeM.
The commerce ministry official quoted earlier said the process of selecting a managed service provider (MSP) for the GeM platform has already begun and tenders will be open within a few days. “GeM will be run on a revenue-sharing model without any government support except for the initial two years. The MSP will keep a portion of fees collected from vendors registered on the GeM platform. This will ensure the MSP is a stakeholder in development of GeM and will be interested to get more and more sellers to the platform,” the official said.
Despite the heavy rush for launching initial public offering (IPO) in 2017, little has changed in investment demand pick-up so far.
Like previous years, the IPO boom is driven by offers for sale (OFS) that give an exit route to private equity (PE) players or existing shareholders rather than raising funds or capital expansion.
According to Prime Database, 12 issues hit the primary markets so far this year raising a total of ₹9,716.70 crore.
However, only one issue was meant for raising capital, and the rest were either just offers for sale or were meant for both purposes.
Avenue Supermarts Ltd is the only IPO this year which raised capital through the issue.
Radhakishan Damani-promoted Avenues Supermarts Ltd, the parent of retailer D-Mart, was subscribed a staggering 104.48 times. It raised ₹1,870 crore through the issue and saw a rise of 104% on debut day at the exchanges on March 21.
Other companies that came up with IPOs in 2017 are BSE Ltd, Music Broadcast Ltd, CL Educate Ltd, Shankara Building Products Ltd, S Chand and Co. Ltd, Housing and Urban Development Corp. Ltd, PSP Projects Ltd, Tejas Networks, Eris Lifesciences, Central Depository Services (India) Ltd and GTPL Hathway Ltd.
The trend was also seen in 2016, which was considered to be one of the bumper years for IPOs in five years. Last year, 26 issues raised ₹26,493.84 crore but only six of them were meant for raising funds.
According to Pranav Haldea, managing director at Prime Database, though there is a beeline of IPOs in 2017, there is missing confidence in companies to raise capital.
“Fund raising still needs to pick up pace in India and to some extent it is definitely concerning. Even qualified institutional placement (QIP) segment has been very tepid in last two-three years. In the last six months, only financial companies have raised funds through QIPs,” he added.