The Hindu Business Line : Primary market mop-up at Rs 23,616 cr

Riding the market boom
Amount raised from follow-on issues rose 90% over the last fiscal
Total sum raised from IPOs declined 26.64%
Rights issue mobilisation was up 14%

Mumbai , April 5

Riding on the stock market boom, companies have raised Rs 23,616.38 crore through follow-on issues and initial public offerings in the just concluded fiscal 2005-06, the biggest amount ever from the primary market during a fiscal, beating the previous financial year's Rs 21,431.56 crore.

A significant feature of last fiscal's primary market for public issues was the dominance of follow-on issues.

According to Prime Database, which tracks India's primary market, 26 listed companies have raised Rs 12,861.30 crore through follow-on issues during 2005-06, the second biggest amount through this route in a fiscal after 2003-04's Rs 14,629.92 crore. This is about 90 per cent higher than the previous fiscal's Rs 6,769.24 crore.

However, the total money raised by companies through the initial public offerings declined by 26.64 per cent in 2005-06 at Rs 10,755.08 crore, compared to Rs 14,662.32 crore in 2004-05, the Prime Database data showed.

Rights issue

Similarly, rights issue mobilisation recorded an increase of 14 per cent in 2005-06 at Rs 4,126 crore, compared with the previous year's Rs 3,616 crore. But, the rights issue figure was just 33 per cent of the Rs 12,630 crore raised in the boom year of 1992-93, Prime Database said.

In the rights issue category, the largest issue was from Hindalco Industries, which raised Rs 2,227 crore. The other big rights issuers included Nicholas Piramal (Rs 333 crore), Pantaloon Retail (Rs 224 crore), Titan Industries (Rs 127 crore), Trent (Rs 118 crore), Andhra Pradesh Paper Mills (Rs 113 crore) and GIC Housing (Rs 108 crore). Looking ahead, analysts said the 2006-07 also looked set to continue the trend. Some of the IPOs lined up for this fiscal include the Rs 6,000 crore offer from Reliance Petroleum, Sun TV's Rs 503 crore (which is open now) and MCX,.

Mr Haldea said the new fiscal (2006-07) appeared promising for rights issues as well. "As many as 31 companies have already applied for or have obtained SEBI approval for raising Rs 2,153 crore," he said. Some of the major ones include Bajaj Auto Finance's Rs 950 crore and California Software's Rs 27 crore issues, he said.