What do IPO printers do when there are no IPOs?

Fall of the IPO market, which at its peak had an average of nearly four offers a day, has had IPO printers looking to their other business segments for sustenance

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The railway ticket for your last train journey could have been printed by the same people who brought you the thick-as-a-phonebook offer documents for initial public offers (IPOs).

The same applies to your telephone bill, your stationary; even the odd text book.

The fall of the great Indian IPO market, which at its peak had an average of nearly four offers a day, has had IPO printers looking to their other business segments for sustenance.

Mahesh Jain, Vice President at Orient Press Limited says that the diversification process began some time ago.

“We started printing railway tickets last year. There are some others who have diversified into real estate,” he said.

Orient is at the top of the printer’s league table maintained by Prime Database, along with another firm-Crystal Forms.

The two printed documents for a total of 41 public issues in the financial year ending in March 2013. This included not just Initial Public Offers but also Follow-On Public Offers, Small & Medium Enterprises IPOs, as well as debt offers.  

This is a far cry from the peak in terms of number of issues which was in the financial year ending March 1996(FY96). The year saw 1333 issues or an average of nearly four IPOs a day.

The peak in terms of amount raised was in FY08 at Rs.41323.45 crore.

The number of IPOs has fallen 97 per cent from its peak to 33 in FY13. The amount raised fell 84 per cent from its FY08 peak to Rs.6497 crore in FY13.

The current financial year is not looking too great either. There have been six IPOs so far.  They raised a total of Rs.951 crore.  And the pipeline looks thin- a total of 17 with permission to raise Rs.3125 crore. Experts remain skeptical about how many would actually look to raise money in the current market environment.

This has taken a toll on the IPO segment of printers, which once accounted for the biggest chunk of their business. It now accounts for less than a tenth of their income.

Pratul Dalal, Executive Director at Western Press said that the company is looking to other avenues to fill the gap. Western’s current printing activities include bills and educational material.

Interestingly, the printing business for public offers is restricted to eight or nine companies. Mehta Print Arts, Shlok Security Printers, Printrade Issues, SAP Print Solutions, KL-HI Tech Secure Print and Y S Hitech Secure Print are some of the other names in addition to Orient, Crystal and Western.

When the going was good, the printers churned out over one million prospectuses per company that came out with an IPO. All this over a period of three or four days with workers staying back in office for days on end.

The return of the good-old-days now seems distant according to Dalal, who feels the current environment points less to an end of the down cycle and more to the end of the road.

“Over the last 30-40 years, we have seen a cycle of boom and bust every five years. This time, one gets the feeling that it may not come back at all…,” he said.