Happy Days Here Again for IPO Mkt

At least a dozen com­pa­nies plan to launch pub­lic of­fers

The Economic Times - - Markets - RA­JESH MASCARENHAS

Fund man­agers and an­a­lysts said stocks that could ben­e­fit from po- NDA’s overwhelming vic­tory will in­fuse life into a mori­bund pri­mary mar­ket with an­a­lysts an­tic­i­pat­ing a flurry of new is­sues in the sec­ond half of the cur­rent fi­nan­cial year. At least a dozen com­pa­nies, in­clud­ing BSE, GMR Air­port, She­ma­roo En­ter­tain­ment, Bharat Mat­ri­mony and some state-owned un­der­tak­ings are plan­ning to launch pub­lic of­fers in the next six months, bankers told ET.

“A sta­ble govern­ment, cou­pled with sig­nals of mea­sures to con­trol in­fla­tion, will re­sult in a stronger eco­nomic out­look for the coun­try. I ex­pect quite a bit of ac­tiv­ity in the next few months,” said Ra­jen­dra Naik, ex­ec­u­tive di­rec­tor, Cen­trum Cap­i­tal.

In the fi­nan­cial year ended March 31, just about ` 1,205 crore was mo­bilised in the pri­ma­rye­quity­mar­ket­through38is­sues,against ` 6,497 crore in 2012-13 raised by 33 com­pa­nies. Many cor­po­rates, af­ter lin­ing up plans to raise a to­tal ` 60,000 crore, de­vel o ped c o l d f e e t . “Be­cause of the strong man­date, the new govern­ment has to deliver in terms of good gov­er­nance, trans­parency and­pol­i­cy­im­ple­men­ta­tion, which will at­tract a lot of in­vest­ment and FDI and re­vive the econ­omy. If econ­omy re­vives, re­tail in­vestors’ risk ap­petite will re­turn and a pos­i­tive ef­fect shall be seen in the pri­mary mar­kets, too,” said Pritvi Hal­dia, MD of Prime Data­base, which tracks the IPO mar­ket in In­dia.

“Some com­pa­nies have com­pleted the back­ground work that goes into of­fer documents. They will hit the pri­mary mar­ket in the next few months” said Vikas Khemani, pres­i­dent - in­vest­ment bank­ing, Edel­weiss Cap­i­tal.

Won­derla Hol­i­days’ IPO be­fore the poll re­sults in­di­cated the un­der­ly­ing ex­cite­ment be­ing built into the mar­ket. The is­sue a month agowas­sub­scribed37.80times.“Many­compa­nies are in need of cap­i­tal to ex­pand, but have not been able to raise funds due to un­favourable con­di­tions,” said Vi­neet Sushanti, man­ag­ing di­rec­tor, Key­note Cor­po­rate Ser­vices.

“There is a lot of pent-up de­mand. There are scores of com­pa­nies where pri­vate eq­uity houses or other in­sti­tu­tional in­vestors are look­ing to exit,” said Hal­dia. Al­though re­tail in­vest­ments will start trick­ling into stocks soon, for­eign in­sti­tu­tional in­vestors will con­tinue to hold the key for the re­cent rally to sus- A long-term en­ergy pol­icy with clar­ity for ex­plor­ers, re­vi­sion in gas prices and a res­o­lu­tion of its le­gal tus­sles is likely to im­prove its fu­ture earn­ings It has the best bal­ance sheet among util­i­ties. Its ca­pac­ity util­i­sa­tion is low at sub-80 lev­els which will in­crease with a pickup in de­mand, re­sult­ing in high growth

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