Business Daily from THE HINDU group of publications
Sunday, Sep 02, 2007
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Business Daily from THE HINDU group of publications Sunday, Sep 02, 2007 ePaper |
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Stock Markets Markets - IPOs
When there is a wavering interest even in listed stocks, one cannot expect investors to have appetite for new stocks.
Moumita Bakshi Chatterjee New Delhi, Sept 1 The volatility in the stock market appears to have hit public issue mop-ups in August. Indian companies mobilised only about Rs 665 crore from initial public offerings (IPOs) and follow-on public offerings (FPOs) during August, a drop of almost 82 per cent from the July level, but above the year’s low seen in March and May. Close to Rs 648.78 crore was raised through five IPOs — Take Solutions, KPR Mill, Motilal Oswal Financial Services, Indowind Energy and Magnum Ventures — while the month’s sole follow-on public offer by Dagger Forst Tools raised Rs 16.23 crore from the market. “The primary market is closely linked to the secondary market, which is currently extremely volatile. Obviously this means that IPOs will be on hold for the time being. When there is a wavering interest even in listed stocks, one cannot expect investors to have appetite for new stocks since the risk-taking ability goes down dramatically. However, I am confident that the public offer pipeline is strong,” said Mr Prithvi Haldea, Managing Director, Prime Database. On Friday, lack of interest from retail investors had forced IT People (India), a provider of manpower to IT and BPO industry, to withdraw its ongoing FPO, sending its stocks plunging by 9.88 per cent to Rs 31 on the Bombay Stock Exchange. A notice issued to the stock exchanges said that while the FPO had received favourable response from Qualified Institutional Buyers (QIBs) and High Networth Individuals (HNIs), the absence of adequate interest from retail investors (in spite of the issue being completely underwritten by the Book Running Lead Managers) led the company to withdraw the issue. According to 2007 monthly-data captured by Prime, a database dedicated to the primary capital market, IPO mop-up stood at about Rs 3,603 crore in July, with June being a bumper month with Rs 11,906 crore mobilisation (DLF Ltd IPO itself raised Rs 9,187.5 crore). The FPOs in June added another Rs 10,570.7 crore to the overall realisations. In contrast, realisations were only about Rs 460 crore in March (the lowest this year); and Rs 682.58 crore and Rs 494.10 crore during April and May, respectively. While January saw 11 public issues raising close to Rs 2,786.25 crore, in February the figure rose to Rs 4,503 crore for 18 IPOs. The February realisation swelled up further through FPO mobilisation of about Rs 90 crore.
Related Stories: IPOs, follow-on offers raise Rs 35,324 cr in Jan-July period Public issues may raise Rs 2,500 cr by June 2007 likely to see bumper harvest of IPOs Grading of IPOs More Stories on : Stock Markets | IPOs | Public Offer
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