The Hindu Business Line : Public issues may raise Rs 2,500 cr by June

Mumbai April 29 Come June and the primary market will buzz with activity, with some IPOs in the pipeline and inflows of Rs 2,500-3,000 crore expected to enter the markets, according to merchant bankers.

The March-April 2007 period saw inflows of Rs 1,068 crore through seven issues entering the primary market. There have been a total of 35 issues in 2007 till April.

Only the IPO of ICRA, the rating agency, received good response. Retail participation in all the other issues was minimal.

"The appetite for IPOs has certainly gone down. Though the secondary market has been up, the primary market still has a long way to go," said Mr J. Niranjan, Head (Investment Banking), ICICI Securities Ltd.

"Last year, money mostly flowed in real estate IPOs. The other, small offers are finding it difficult to get subscriptions. Only IPOs of companies with very good fundamentals, like MindTree, ICRA and Idea, received a good response," he added.

Several issues, expected to open from mid-May, are awaiting SEBI clearance, the merchant bankers said.

"Investors are waiting for the secondary market to stabilise once corporate results are announced. Post-results, we should start seeing activity," said a merchant banker.

"Issues like Omaxe, Everonn Systems and Simplex Projects will now come to the markets. By June, we should see at least Rs 1,700 crore coming in," said Mr Mayank Dalal, Senior Vice-President, Centrum Capital. Another merchant banker added: "We will see a lot of issues from the mid-cap companies in the June-July period."

However big the issue size, pricing will be the key determinant. A merchant banker said: "Recently, even fundamentally good companies did not go through as expected as they were priced higher than market expectations." The retail investor is still shying away from the primary market. "In the past few months, on the aggregate, money was made, but investors have lost money in smaller issues," said Mr Niranjan.