Comments
India may need a saviour for its initial public offering market, with proceeds raised since January falling to a five-year low.
The eight companies that have listed in 2020 have raised just $7.3 million, according to data compiled by Bloomberg. Their deal size has been tiny – $900,000 on average, with Hindprakash Industries Ltd’s $1.6 million share sale being the largest. Their performance has also been far from stellar as their shares have climbed 1.8 per cent on average, weighed by offer size, compared with a 5 per cent advance in the MSCI India Small Cap Index through the last close.
The coronavirus outbreak has thrown a spanner in IPO works in India, as investors grapple with the market uncertainty that comes with it, said Pranav Haldea, a Managing Director at Prime Database Group, a capital-market database provider. “Certain issuers have adopted a wait-and-watch approach to see if the budget announcement of February 1 has any major impact on their business.”
On the bright side, a series of billion-dollar initial share sales are in the pipeline. The most high-profile deal is the privatization of state-run behemoth Life Insurance Corporation of India, which could fetch as much as 900 billion rupees ($12.6 billion).
Then there’s Tower Infrastructure Trust, which filed for an IPO of as much as $3.5 billion, and SBI Cards and Payment Services Ltd., backed by State Bank of India and Carlyle Group, which is targeting a listing of about $1.3 billion.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.