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| Fund raising via primary mkt may pick up in H2 2009: JPMorgan |
| Press Trust of India / New Delhi May 11, 2009, 16:21 IST |
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India Inc's capital raising through primary market, which continues to be negligible so far this year, is likely to pick up in the second half of the year if market sustains its upward rally, says a report.
"Fund raising could pick up significantly into 2H (second half) if markets sustain and the national elections throw up a stable government," JP Morgan said in its report 'India Equity Strategy'.
Equity issuances have been negligible so far this year as only one initial public offering from Edserv Softsystems with a relatively small issue size of over 39.73 lakh equity shares entered the capital market in March.
Indian companies' fund-raising activity from overseas primary markets has also remained insignificant this year.
"... The intent to raise funds remains strong, but investor sentiment has not been supportive until recently," JP Morgan India analyst said in the report.
Marketmen believe investor's interest in primary market issues may pick in next few months as some offers, postponed last year amid adverse market conditions, are trickling back.
Adani Power, a part of Gautam Adani-led conglomerate with interests spanning from FMCG to infrastructure, has refiled its draft prospectus for an IPO with market regulator SEBI and is estimated to raise more than Rs 2,000 crore.
This is the second time Adani Power is planning to come out with an IPO, as its previous attempt were scuttled due to adverse market conditions.
In its revised draft prospectus filed with the SEBI, Adani Power has proposed to sell over 33 crore equity shares of Rs 10 face value each, which would account for about 15 per cent of the company's post-issue equity capital.
In 2008, only Rs 19,000 crore were raised, including Reliance Power's Rs 12,000 crore IPO which was the last big ticket initial public offering. In 2007, Rs 40,000 crore were raised through initial public offerings.
Uncertain market conditions since mid-January in 2008 have dampened investors' appetite so much that over 70 firms, including Reliance Infratel and MCX, held back their IPOs, which were expected to together raise over Rs 43,000 crore.
According to primary market tracking firm Prime Database, Godrej Properties, Mahindra Holiday Resorts, Essar Power, GMR Energy, who were close to making an initial public offer last year, would have collectively raised a whopping Rs 43,129 crore but are now awaiting better times.
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