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IPO mart plumbs the depths

Deepak Korgaonkar

Annus horribilis. That sums up 2001-02 for initial public offerings, with just six companies floating issues to raise Rs 11.01 billion during the year. Of this, just two IPOs hit the mart in the last seven months (September-March).

During the year, there were three major issues - Bharti Tele-Ventures, Punjab National Bank and South Asian Petrochem.

The three, together, accounted for 97 per cent or Rs 10.72 billion mobilised by the six companies.

The remaining three, City on-line services, IMAP Techno and SMR Universal Softech combined mopped up a paltry Rs 280 billion.

Sluggish conditions forced most of the companies to defer their IPO plans. Of the twelve companies which had filed offer documents with the Securities and Exchange Board of India for a total amount of Rs 24.32 billion, only two, Bharti Tele-Ventures and Punjab National Bank, sailed through.

Bharti Tele-Ventures issued 185.3 million equity shares at its pre-set floor price of Rs 45 per share (Rs 10 each at a premium of Rs 35 per share) in January, 2002, raising Rs 8.34 billion.

Punjab National Bank recently hit the market with a Rs 1.65 billion issue (53.1 million equity shares of Rs 10 each at a premium of Rs 21 per share).

The companies that had lined up IPO plans are Cee (I) TV Entertainment, Creative Infosys, Dwarikesh Sugar, Gurukul Techno, Ken Software, Manush Distributors, Manipal Media, Singhal Credit, Sindhu Holdings and Vins Bioproducts.

Though these companies received the Sebi nod for floats, tough conditions forced a rethink.

Central Bank of India, Punjab & Sindh Bank, United Bank of India and Canara Bank in the banking sector, media company Sony Entertainment Television, telecom enterprise Birla-Tata-AT&T and news provider New Delhi Television are among the companies stated to have a capital raising plan.

1995-95 was a record year with 1,444 primary issues offered. That year, companies raised a whopping Rs 138.87 billion from the capital market.

This was followed by Rs 57.33 billion in 1996-97 through 1,169 issues, and a mop-up of Rs 21.82 billion through 125 issues in 1997-98. In 1998-99, the number of issues plunged to 19 with the amount raised standing at Rs 3.65 billion.

In 1999-2000, 38 companies raised Rs 22.37 billion through IPOs.

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