"There would be some big issues from banks as they need to raise equity capital."

Virendra Verma

Mumbai, Oct. 23

THOUGH the secondary market has cooled-off a bit from the 8,800 level, the trend in the primary market does not look so.

Filings with SEBI since September this year show that around 20 companies (both listed and un-listed) plan to raise funds to the tune of at least Rs 5,000 crore in the next 3-4 months.

Among the big issues that are likely to hit the market are Bank of Baroda, Triveni Engineering, Punj Lloyd and ABG Shipyard.

In the rights issue, where existing shareholders only can apply for shares, Hindalco Industries will be the biggest with around Rs 2,500 crore.

Several of these issues have already got the SEBI clearance and now it is up to the companies to decide when they want to hit the market.

"With almost all investment opportunities drying up and the constant lowering of interest rates, the IPO scenario looks very attractive.

Most issues in the past have received healthy over-subscriptions and importantly have provided handsome post-listing gains," said Mr Prithvi Haldea of Prime Database, an independent primary market-monitoring firm.

According to Prime Database, in the first half of this fiscal, Rs 7,622 crore was raised as compared to Rs 9,048 crore in the corresponding period last year.

Top investment bankers said the pipeline for public issue has not shrunk despite the new SEBI rules, which have made proportionate allotment for institutional investors.

They said more issues are likely to hit the market, most of them from banks, which have to increase their capital adequacy ratio.

"There would be some big issues from banks as they need to raise equity capital to shore up their tier-1 capital as their business is growing," said an official of a leading investment banking firm.

Most of the issues that hit the market this year have provided good returns to the investors.

Except for HT Media and a few others, most of the issues are still trading above the issue price even after the fall in stock prices in the last one-month.

The issues that are likely to hit the market are from varied sectors including engineering, retail, multiplex, banking and others.

(This article was published in the Business Line print edition dated October 24, 2005)
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