Sluggishness Hits Ipo Mart

Sluggish conditions on the stock markets seem to have affected the initial public offer (IPO) market with virtually no company entering the market to raise resources since mid-April, 2001.

Barring just two companies - IMAP Technologies (which raised Rs 5.41 crore) and SMR Universal Softech (Rs 19 crore), in the first fortnight of April this year - no IPO came forth since the period till date. The total mop up by the two stood at Rs 24.41 crore.

However, since then there has been no IPO in the market. Even the filing of offer documents with the Securities and Exchange Board of India (Sebi), seems to have dried up. Manush Distributors was the only offer document filed with Sebi in April and since then not a single equity offer document came forth.

Already, the resource mobilised from the primary market have dipped drastically. In April, funds mobilised from the domestic market through equity issues amounted to only Rs 43.5 crore, a 12-month low.

Likewise, mobilisation through debt issues dipped to Rs 617 crore in April 2001, as compared to Rs 3,316 crore in March 2001.

Resources mobilised from the capital market (including private placements) dipped by nearly 64 per cent to Rs 1,283 crore, as against Rs 3,590 crore raised in March 2001.

The scenario on the primary market appeared very bullish in the beginning of the calendar year. In January 2001, 533 companies were at different stages of entering the primary market to raise Rs 43,708.76 crore.

Prominent among them were NDTV, Escotel Mobile Communications, Nimbus Communications (Rs 182 crore), Applitech Solutions (Rs 98 crore), Datamatics (Rs 100 crore), Mahindra British Telecom, UTV Software (Rs 100 crore), Domino's and Godrej Sara.