Indian cos garner Rs 1,050 cr via IPOs in H1 of FY14

Indian companies mopped up a total Rs 1,050 crore through initial public offers (IPOs) in the first half of 2013-14, sharply up by 36% over the same period of the last fiscal.

According to Prime Database, leading database on primary capital market, 16 firms collectively raised Rs 1,050 crore via IPO route in the six months ended September 30, 2013.

In the first half of 2012-13, as many as 13 companies had raked in 772 crore capital through initial share sales.

Interestingly, of the 16 IPOs, which hit the capital market in the first half of the current fiscal, 15 were from the Small and Medium Enterprise (SME) sector.

There was only one non-SME IPO, (Just Dial that garnered Rs 919 crore), which accounted for 87% of the total mobilisation.

Among sectors, information technology space dominated with three firms mopping up Rs 1,927 crore, which is 29% of the total amount garnered.

Market experts attributed the reason for big companies avoiding the IPO route to rake in funds to an uncertain and volatile equity markets, coupled with a lack of appetite among retail investors.

"With the secondary market still being extremely volatile and overall lack of confidence, no immediate revival of the primary market is seen in balance part of the year... The biggest disappointment for the primary market has again been the lack of divestments by the Government,"  Prime Database Managing Director Pranav Haldea said.

"In the six-month period, 14 companies, intending to raise Rs 4,500 crore, which had obtained approval from Sebi allowed it to lapse. At present, only 16 companies planning to raise Rs 3,800 crore are holding Sebi approval and another 10 companies intending to raise Rs 3,100 crore have filed with Sebi and are awaiting approval," he added.

In terms of the method of offering, only 1 of the 16 IPOs of the period, were through the book-building route, with balance 15 SME issues through the fixed price method. The facility of anchor investors was used by one company.