IISL eyes IPO business for growth

Investor Services of India (ISIL), which has been acting as registrar and transfer agent (RTA) for bond/ debt issues in the last 15 years or so, is now eyeing business of handling initial public offerings (IPOs), where lack of enough number of RTAs is creating huge pressure on the system in completing the IPO-related works such as data entry, share allotments, refunds, equity servicing etc in a seamless manner.

ISIL, which is promoted by a clutch of institutions including IDBI, Life Insurance Corporation and Tata Sons, is building up expertise relating to book-building, besides upgrading its technology to handle IPOs, said Abraham Pallithazha, its managing director and CEO.

Karvy Computershare is by far the biggest player in the industry while others such as Datamatix, MCS, Intime Share, Big Share and Sharepro also are active as registrar and transfer agents of public issues. A sudden rise in IPOs, especially when most issues come around the same time, create pressure in the system as was witnessed during some of the big issues in recent times.

"Bond issues are difficult to handle compared to IPOs. Over 19 lakh investors participated in IDBI's deep discount bonds issued during 1992 and 1996. Similarly, we are servicing 30 lakh investors of IDBI's Omni bonds issue," he said, adding that the change in focus to IPOs was due to the non-issuance of bonds/ debt from IDBI, which converted itself from a development financial institution (DFI) to a full-fledged bank, was not in a position to tap the bond market following lose of status as a DFI.

IDBI holds 25 per cent stake in ISIL and it is the single-biggest stakeholder in the company. This meant a regular stream of business from the parent.

R Kannan, deputy general manager of IISL said the company recently made a first step in the public issue market by getting the mandate as RTA for the Ushar Agro's IPO. "But, it was a fixed price issue," he explained, adding that the company has roped in a senior executive from a competing firm to help it in building the expertise in book-building issues.

"We are now looking for mandates from book-building issues. But, we are not looking at big issues. We want to be slow and steady," said Pallithazha.