IPO market remains dismal; raises a mere Rs 1,050 crore in first half of FY14

Out of 16 IPOs, 15 were from the stable of SME sector

Indian primary market has continued to remain dull in the first half of the current financial year. The overall mobilisation through initial public offerings (IPOs) in the H1FY14 stood at a mere Rs 1,050 crore. Though compared with the same period last year, it is higher by around Rs 280 crore. But when compared with the same period since 2007-08 to 2011-12, primary markets is quite dismal.

 

Further, 16 IPOs hit the market during April-September. Of which, 15 came from the stable of SME sector. Just Dial, which raised Rs 919 crore, was the only non-SME issue which makes up 87% of the total fund raised via IPO route.

 

According to Pranav Haldea, managing director of PRIME Database, "The funds raised through the OFS route were only due to promoters of listed companies having to dilute their stakes to meet with SEBI’s requirement of Minimum Public Shareholding. There were as many as 67 OFS (previous corresponding period 6), which mobilized Rs.5,626 crore (previous year Rs.280 crore). The largest OFS was of Rs. 1,008 crore (Oracle Financial Services). 

 

With the secondary market still being extremely volatile and the overall lack of confidence, no immediate revival of the primary market is seen in the balance part of the year, he added. 

 

According to him, in the 6 month period, as many as 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.