Stock sales may jump this year: Goldman

Share sales by Indian companies may increase to $13 billion this financial year as a revival in the nation’s economic growth lures investors, Goldman Sachs Group Inc said.

Companies may raise $4-6 billion from initial public offerings in the 12 months ending March 31 and another $5-7 billion through share placements over the next two to three months, said Anshul Krishan, who heads the India Financing Group at the local unit of Goldman. Stock sales totaled $808 million in the 12 months to March 31, according to data compiled by Bloomberg.

“Several companies are bound to actively revisit the IPO market if the current market trajectory continues and as they firm up their capital needs,” Krishan said in a telephone interview in Mumbai yesterday.

India’s benchmark index gained 28 per cent in May, its biggest monthly rally in 17 years, as overseas investors bought the most amount of stock in 19 months. Inflows accelerated on speculation that the ruling Congress party’s biggest election victory in two decades will allow the government to reduce barriers to foreign investment in insurers and retailers, plans that had been blocked by its former communist allies.

Property developers including DLF, Unitech and Indiabulls Real Estate have raised $1.7 billion in share sales since April. Indian companies or their founders have collected $3 billion over the past three weeks, either by transferring existing stock or selling new shares, and more local companies plan to raise at least four times that number, Credit Suisse Group said in a note to clients on May 25.

Overseas funds bought a net Rs 20,117 crore ($4.3 billion) of Indian stocks in May, the biggest monthly investment in the nation’s equities since October 2007, according to the market regulator.

India’s economy grew more than economists had estimated last quarter as Prime Minister Manmohan Singh boosted spending to steer the country through the global recession.