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IPO mop-up plummets in April
Stung by bouts of volatility in the market, the initial public offering (IPO) mop-up in April plummeted to Rs 14 crore, nearly a 97 per cent drop compared with the realisation in the previous month and the lowest since February 2005.
However, the pipeline for 2008 appears robust with companies like Adani Power and Jaiprakash Power lining up their IPO plans.
The only IPO to hit the market during April was that of Aishwarya Telecom Ltd b an Indian maker of telecommunications testing equipment b which entered the capital market with a public issue of 40 lakh equity shares. According to PRIME, a database dedicated to the primary capital market, between January and April 2008, 18 public issues raked in close to Rs 14,908 crore.
"The low level of mobilisation in April is not an indication of the depth of the market, it is merely a reaction to the market crash in January this year. Typically, when market takes a beating, one of the first victims is the public issue market. However, the pipeline for IPOs in 2008 remains robust," said Mr Prithvi Haldea, Managing Director of PRIME.
Earlier this week, Adani Power filed draft document for its IPO, estimated to raise over Rs 5,000 crore. Adani Power, whose two other group companies b Adani Enterprises and Mundra Port & SEZ b are already listed on the bourses, is offering 29.69 crore equity shares to the public in the IPO, to be conducted through a 100-per cent book building process. Besides this, JP Associatesb subsidiary Jaiprakash Power is planning to raise around $800 million to $1 billion from its IPO.
"There are 15 smaller companies that are holding SEBI approval hoping to enter the market. Another 46 are awaiting SEBI approval. We are looking at an uptrend from here. Things are getting brighter now and the secondary market is stabilising. Unless there is another major crash, the IPO market will be stable enough, if not as buoyant as 2007," he said.
