The Hindu Business Line : IPO mop-up lacklustre in May at Rs 300 cr

New Delhi, June 14 The dry spell in the capital market continued in May 2008 with four public issues worth over Rs 300 crore hitting the market, a drop of almost 38 per cent over the year-ago period. Although the IPO mop-up in May is higher than Rs 14 crore in April, a rebound in the short term is not in sight, say market observers.

“A handful of IPOs have hit the market, we can’t call it a revival. There have been IPOs in the past weeks but the amount raised is relatively small. Even the month of June has seen five IPOs, but all below the Rs 100 crore threshold,” said Mr Prithvi Haldea, Managing Director of PRIME, a database dedicated to the primary capital market.

Both Archidply Industries’ Rs 53-crore public issue and Lotus Eye Care Hospital’s Rs 42-crore public offer are slated to close on June 17. First Winner Industries’ IPO, earlier scheduled to close on June 12, would also remain open till June 17, as the issue had remained unsubscribed. The company has also revised the price band from the Rs 120 to Rs 130 a share to Rs 115 to Rs 125 a share.

Market sentiment tad better

“We are seeing public offers from companies that are anxious to raise funds as the projects are stuck. However, the market sentiment is now a tad better,” Mr Haldea added. According to PRIME, between January and May, 22 IPOs raked in about Rs 15,215 crore; Manjushree Extrusions Ltd came out with the year’s sole follow-on public offer (FPO) of just over Rs 23 crore.

During May, Gokul Refoils and Solvent, a Gujarat-based company, engaged in the business of solvent extraction, refining of edible oils and Vanaspati manufacturing, entered the capital market with a public issue of 71.58 lakh equity shares of Rs 10 each.

The Rs 139.59-crore issue closed on May 13. Anu’s Laboratories pegged the issue price of its IPO at the upper price band of Rs 210 a share. The issue which was subscribed 8.35 times had closed on May 15.

In addition, Neeraj Cement Structurals, an engineering and construction company, had entered the capital markets on May 26, with a public issue of 32.50 lakh equity shares of Rs 10 each in the price band of Rs 175 to Rs 190.

Related Stories:
IPO mop-up plummets in April
Turmoil in market takes toll on IPO mop-up
Market turmoil triggers IPO market cool-off