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Average IPO volume up; total number of issues down in 2009: Survey

Average IPO volume up; total number of issues down in 2009: Survey
PTI
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First Published: Thu, Feb 25 2010. 04 19 PM IST
Updated: Thu, Feb 25 2010. 04 19 PM IST
New Delhi: The average size of initial share sale offers by Indian companies nearly doubled to Rs 965 crore in 2009, even as total number of issues recorded a decline over 2008 levels, the Economic Survey said on 25 February.
In the year gone by, companies -- both private and public -- mopped up Rs 19,296 crore through 20 initial public offerings (IPOs). Against this, the year 2008 saw 37 IPOs raising Rs18,393 crore.
“The mean IPO size increased to Rs965 crore in 2009, from Rs497 crore in 2008. The total number of IPOs declined to 20 in 2009, from 37 in 2008,” the Survey said.
The IPO market was on fire post the decision of UPA government-II to dilute stake in PSUs as investors were waiting for these IPOs to test the primary market.
The government divested stake through IPOs in NHPC and Oil India to mop up a combined over Rs8,800 crore.
Some of the big ticket IPOs of 2009 include NHPC (Rs6,000 crore), OIL (Rs 2,300 crore), Adani Power (Rs3,160 crore), JSW Energy (Rs2,700 crore) and Indiabulls Power (Rs1,500 crore).
“Though resource mobilisation from the primary market through equity investments was sluggish in 2009, both in terms of number of issues and follow-on-public offerings, there was an increase in debt market activity and private placements,” the Survey said.
Besides the primary market, the business houses’ appetite for fresh capital also decreased in 2009 as the total amount of capital raised by equity issues, including IPOs and rights issues, nearly halved to Rs 23,098 crore in 2009.
The total amount of capital raised through equity issues during 2008 was Rs49,485 crore.
While there was no debt issues in 2008, the year 2009 saw three companies resorting to fund raising via debt instruments and mobilising Rs3,500 crore.
The total amount raised through private placement of debt in 2009 was Rs2.38 lakh crore, a 53% growth from Rs1.55 lakh crore mobilised in 2008, the Survey said.
Further Indian companies mopped up around Rs 15,266 crore through American Depository Receipts (ADRs) and Global Depository Receipts (GDRs).
Some analysts say that the revival in the secondary market is also playing a key role in the heavy rush of IPOs. The Bombay Stock Exchange barometer Sensex has surged by over three-fourth in 2009 to end at 17,464.81 points.
There are some 45 public issues lined up for 2010 estimated to raise about Rs30,000 crore. However, analysts feel pricing will remain key for the IPO market as appetite is intact in the market for fresh issues.
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First Published: Thu, Feb 25 2010. 04 19 PM IST
More Topics: Economic Survey | GDP | NHPC | Oil India | Adani Power |