New Delhi: As many as 15 companies, including Anil Ambani Group’s Reliance Infratel, have refrained from bringing out their IPOs so far this year despite obtaining the go-ahead from market regulator Sebi to collectively raise an estimated Rs 25,000 crore.
The companies which have let their regulatory approvals lapse since January this year also include Jindal Power, Lodha Developers, Sterlite Energy, BPTP Ltd, Ambience Ltd and Gujarat State Petroleum Corp Ltd.
The list of 15 companies mostly comprises entities from the real estate and power sectors.
Reliance Infratel was the first company that failed to launch its Rs 5,000 crore IPO before the regulatory approval lapsed on 11 January, while Jindal Power is the latest addition to the list after the approval for its Rs 7,200 crore public issue expired on 27 May.
Market experts believe many companies were averse to hitting the market because of the subdued market conditions, as well as the fact that firms that did implement their public stake sale plans are trading below the issue price.
“As the first half of 2011 has seen missing FII inflows, resulting in lukewarm market sentiment, it is surely taking a toll on the IPO market,” SMC Global Securities Strategist and Head of Research Jagannadham Thunuguntla said.
In all, 15 public issues were planned with the objective of raising about Rs 25,186 crore.
Other companies that axed their IPO plans at the last minute include Glenmark Generics, Neptune Developers, Kumar Urban Developers, AMR Constructions, Asian Business Exhibition & Conferences, Kabirdass Motor Company, PCI Ltd and Ankita Knitwear.
“This list is featured largely with real estate and power industries. That may be because real estate is completely out of favour of the market. And power has also become out of favour of the market because of the fact that several IPOs from the power industry in the past have given dismal returns to the investors,” he added.
Besides volatile market conditions, a high interest rate regime and a slew of recent scams involving real estate companies are also said to have contributed to the failure of realty players to successfully tap the market to raise funds.