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Indian companies raised a total Rs 1,264 crore through initial public offers in the first half of 2012, sharply down by 63 per cent over that in the same period last year.
According to an analysis of data available with the stock exchanges, seven Indian firms raised a total Rs 1,264 crore via IPO route during the six months to June 2012. In the first half of 2011, as many as 22 companies had raised Rs 3,392 crore capital through initial share sales.
Besides, public sector firm ONGC raised Rs 12,000 crore through follow-on public offer (FPO) in the first half of the year.
Experts said that many companies were averse to hit the market due to subdued market conditions as well as the fact that firms that did implement their public stake sale plans were trading below the issue price.
“There has been a lower appetite among investors for IPO in a weak secondary market, therefore many companies are avoiding this route for fund raising despite having Sebi’s approval. Besides, some firms have shelved their IPO plans due to poor response from investors,” Geojit BNP Paribas Research Head Mr Alex Mathew said.
Among the major IPOs of 2012, commodity bourse MCX raised Rs 663 crore, Tribhovandas Bhimji Zaveri garnered Rs 200 crore, Speciality Restaurants raised Rs 176 crore and state-owned NBCC mopped up Rs 127 crore.
Other IPOs that entered the market were tutorial firm MT Educare, South-based Olympics Card and non-banking finance company BCB Finance.
However, three companies - packaging materials maker Plastene India, healthcare firm Goodwill Hospital and auto parts manufacturer Samvardhana Motherson Finance, shelved their IPOs in 2012 so far citing poor response from the market. These entities were aiming to mop up a total of Rs 1,805 crore from the capital market.
Goodwill Hospital again filed draft papers in May this year with market regulator SEBI for the public issue. The company now plans to raise Rs 98 crore through IPO.
In the first half of 2011, only one firm speciality chemicals manufacturer Galaxy Surfactants had shelved its IPO.
Moreover, at least 17 companies had to give up the approvals they had obtained from the securities market regulator for their IPOs in 2012, according to SMC Global Securities.
“I expect sluggish market conditions would continue and some recovery would be seen in the second half of the year.
The move would seen companies coming out with their IPO plans,” Mr Mathew said.
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