Secondary Market Blues Dent Ipos
On an initial reckoning, 268 of the 577 companies (46 per cent) that entered the market could not close their issues on the earliest closing, with as many as 250 having to keep their counters open till the last date.
Five issues devolved during the period, while 14 issues, which failed to collect the minimum subscription amount, had to refund the application money. For 115 firms that tapped the market, the final closing date was also the earliest closing.
According to Haldea of Prime, the reason for the poor performance was the state of the secondary market. However, 577 issues hit the market during the period, marginally higher than the 571 issues that tapped the market in the year-ago period. The amount collected, though, fell 10 per cent to Rs 4,402.76 crore.
Twenty-one firms had to cancel their issues on the eve of their opening owing to inadequate disclosure of information.
As many as 185 issues were made by finance companies, and about 72 cent of the issues were not appraised.
The period was witness to the first set of book-building issues from ICICI, L&T, Tisco and Arvind Mills.
About 95 per cent of the issues -- 548 of 577-- were initial public offerings, while 20 firms put out offers for sale.
Thirty-seven issues were made by 100 per cent export-oriented units.
Small issues continued to dominate the market. In all, there were only 28 issues above Rs 10 crore, including five above Rs 100 crore. Twenty-four firms tapped the market with issues of less than Rs 1 crore each, and 126 companies had a post-issue capital below Rs 5 crore.
According to Haldea, the Bombay Stock Exchange seems to losing its hold on the primary market.
In terms of underwriting, National Stock Exchange brokers took up 27 per cent of the total underwriting offered to brokers, relegating BSE to the second postion with a 25 per cent share.
In terms of listings, Ahmedabad seemed to be the most sought-after exchange, with 385 of the 577 firms proposing to list their issues on the bourse.
The premium element in issues was hit the most, constituting a low 9 per cent share of the total amount raised, while debt constituted a high 48 per cent share.
Of the 78 premium issues, there were only 10 issues that have sought a premium of above Rs 50. These issues were Khandwala Securities (Rs 110), Apcotex Lattices (105), Jain Studios (80), Super Auto Forge (70), Ambika Cotton Mills (68), H-lon Machines (65), Numeric Power Systems (65), Kripa Chemicals (65), Asian Star (65) and Archies Greetings and
Gifts (60).