No bulls for IPOS

Lack of retail investors seems to have deterred IPO plans

The persistent inflow of funds from overseas investors and a buoyant mood in the secondary markets has failed to lift investor sentiments in the IPO market. In 2013, not a single company had so far announced the launch of its initial public offer (IPO).

This is despite fact that India had received over $2 billion (`13,400 crore) of investment from foreign institutional investors (FII) during the first three weeks of the current calendar year, helping the broader market to sustain its winning momentum.

However, experts believe that the activity in the primary market or the IPO markert would gradually pick up, if the secondary market is able to sustain its positive momentum.

“My strong sense is that by February, we should see a couple of companies lining up their IPO’s,” observed Jagannadham Thunuguntla, the head of equity and strategic research, SMC Global Securities.

According to industry sources, companies like ACB India, which operates coal washeries and local search service provider Just Dial have started preparatory works for their proposed public offers.

According to Bloomberg, Ramky Enviro Engineers Ltd, a Hyderabad-based waste management company, plans to raise $200 million through an IPO in February.

The company is expected to file its application for the IPO next month, the news agency said quoting its executive director Goutham Reddy.

“Issuers don’t want just institutional participation. They also want retail participation. With small investors showing signs of returning to the market, I believe at least 8-10 companies would be hitting the market with their IPO’s before the end of this fiscal year,” commented Mr Rajendra Kanoongo, president, merchant banking, Ashika Capital Markets.

According to him, the `90 crore IPO from Hyderabad based Sai Silks Kalamandir and `375 crore IPO from Belgaumbased Vishwaraj Sugar Industries are expected during March 2013.