Small-cap public issues provide life support to primary market

Our Bureau Kolkata | Updated on March 12, 2018 Published on October 09, 2012


Rs 492 cr only mobilised through IPOs in the first 6 months

The primary equities market slumped into a stupor in the first half of the current fiscal and fared the worst in the past seven years.

Had it not been for some 10 SME IPOs, out of a total of 13, the market could have been declared clinically dead, PRIME Database suggested.

Public issue market mobilised Rs 492 crore through fresh issues during the first six months. Add to that another Rs 280 crore through the newly introduced route of Offer for Sale of Shares by promoters through stock exchange mechanism (OFS), the figure comes to Rs 772 crore.

According to Prithvi Haldea of PRIME, the country’s premier data warehouse on primary capital market, this mobilisation is significantly lower than the Rs 9,553 crore in the corresponding period of the preceding year. 

The April-September period was dominated by small IPOs; the average deal size was Rs 37 crore. “Of the 13 IPOs, as many as 10 were issues from the SME sector,” PRIME said. It pointed out that the period witnessed the launch of SME platforms by both the NSE and BSE. Of the IPOs, 9 were of less than Rs 10 crore. The largest issue in the period was of Rs 200 crore.

By number, the period witnessed 13 IPOs and 6 OFS, compared with 29 IPOs and 1 FPO in the corresponding period last year.

PSU divestment

Despite a target of Rs 30,000 crore and continuing announcements, no divestment took place in the first half of the current fiscal (The corresponding period of the previous year had seen divestments of Rs 1,145 crore through one issue).

“The pipeline of divestment continues to become larger by the day yet nothing of it has materialised”, PRIME said.

As the secondary market is currently showing some buoyancy, the outlook for the primary market appears to be improving. On the immediate horizon is the Rs 5,000 crore Bharti Infratel IPO and the Rs 2,500 crore IPO from Rashtriya Ispat Nigam.

The market could also see offerings from some of the 35 companies already holding SEBI approval and another 24 companies that have filed with SEBI and are awaiting approval.

The H1FY13 saw a continuing activity in the public debentures market, though lower by amount than the preceding year. Six issues raised approximately Rs 1,675 crore, compared with seven raising Rs 4,484 crore in the corresponding period of the preceding year. All the six issues were by NBFCs.

Published on October 09, 2012
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