In­dia's Cos look­ing to tap IPO mar­ket on re­form push

The Pak Banker - - Front Page -


At­tracted by im­prov­ing in­vestor sen­ti­ments in the stock mar­ket, com­pa­nies are warm­ing up to the idea of rais­ing funds through ini­tial pub­lic of­fers and a num­ber of com­pa­nies have firmed up their IPO plans to hit the mar­ket.

At least five com­pa­nies have al­ready filed their draft of­fer doc­u­ments for IPOs with the mar­ket reg­u­la­tor Sebi in the past cou­ple of months, while a sim­i­lar num­ber of com­pa­nies, in­clud­ing re­tail chain op­er­a­tor Spencer's, satel­lite TV broad­cast ser­vices arm of Video­con and Tata Sky are also said to be look­ing to tap the IPO mar­ket.

Ex­perts say that the sen­ti­ments have im­proved af­ter var­i­ous re­form mea­sures an­nounced by In­dian govt and the mar­ket reg­u­la­tor in the re­cent weeks, while an up­trend in the sec­ondary mar­ket is also help­ing bring­ing com­pa­nies to the mar­ket.

The com­pa­nies hav­ing filed their draft of­fer doc­u­ments since Septem­ber in­clude Ca­lyx Chem­i­cals and Phar­ma­ceu­ti­cals, Mad­hya Bharat Agro Prod­ucts, SMC Global Se­cu­ri­ties, Bharti In­fratel and G B Tools and Forg­ings.

Be­sides, RP-San­jiv Goenka Group CESC said it will list Spencer's by next year and the satel­lite TV broad­cast ser­vices arm of Video­con Group's Video­con D2H and Tata Group's Tata Sky are also re­port­edly plan­ning to hit the cap­i­tal mar­ket in the near fu­ture. Most of the com­pa­nies plan to utilise their pro­posed IPO pro­ceeds for ca­pac­ity ex­pan­sion as well as work­ing cap­i­tal re­quire­ments. Sebi Chief U K Sinha re­cently said that the reg­u­la­tor is notic­ing a re­newed op­ti­mism about the econ­omy and about the mar­ket.

Ad­mit­ting that IPO mar­ket has been very slug­gish so far this year, Sinha said that a re­newed in­ter­est was be­ing no­ticed for past few weeks, giv­ing an im­pres­sion that peo­ple are op­ti­mistic and they are go­ing to make in­vest­ments.

"The cur­rent mar­ket con­di­tions has turned favourable for com­pa­nies plan­ning to come out with their IPOs mainly on ac­count of var­i­ous ini­tia­tives taken by In­dian govt," Sudip Band­hopad­hyay MD and CEO at Des­ti­money Se­cu­ri­ties said. "Be­sides, fes­tive sea­son is also ap­proach­ing so I ex­pect many com­pa­nies that with­drew their IPO and com­pa­nies that have not hit the cap­i­tal mar­ket de­spite get­ting Sebi's ap­proval on sub­dued mar­ket con­di­tions would def­i­nitely plan to go ahead with their pub­lic is­sues," he said. In the last two months, broader mar­ket Sen­sex gained 1,125 points or more than six per­cent as For­eign In­sti­tu­tional In­vestors (FIIs) in­vested a hefty sum of about Rs 30,000 crore on the back of a slew of re­forms ini­ti­ated by In­dian govt.

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