IPOs: Flavour of the season for India Inc
Although the year that is drawing to a close has been good for IPOs with over 100 deals, including some mega public issues like that of DLF, as many as 50 companies that initiated their public issue process this year are still awaiting the necessary regulatory approvals.
This includes the planned IPO of state-run National Hydroelectric Power Corp (NHPC), which filed its draft red herring prospectus over eight months ago in April and is among the longest pending public issues for the year.
Among other high-profile IPOs in the queue are that of Reliance Power, which filed its DRHP on October 3 with market regulator SEBI. The regulator is currently awaiting "clarifications" from the IPO's lead managers for issuing its observations, which are statutory requirements to go ahead with the public issue.
Reliance Power is being touted as India's biggest ever IPO with an estimated size of over USD 3 billion, surpassing just over USD 2 billion raised by DLF. This would be the first ever IPO from Anil Ambani group after being carved out from the erstwhile Reliance empire in 2005.
Besides, Biyani-led Future Group had also filed the draft prospectus for its financial services arm Future Capital about three months earlier and is still under the process.
Other proposed IPOs that would not be able to hit the market this year include that of real estate major EmaarMGF Land, Oil India, Titagarh Wagons, Gammon Infra Projects, Surya Foods and Rural Electrification Corporation (REC).
EmaarMGF is the second biggest pending IPO with an estimated size of about Rs 6,750 crore, while NHPC, REC, Oil India and Future Capital are estimated to raise between Rs 1,200-2,200 crore each.
The state-run firm NHPC had filed its draft offer with SEBI on April 2, while another state-run power firm REC's failed its draft offer on August 23.
EmaarMGF had filed its prospectus on September 26, while Future Capital papers were submitted on September 28.
Some of the companies like Oil India, Mahindra Holiday and Resorts India and Mandhana Industries filed their initial prospectus this month and are currently going through processing as per SEBI guidelines.
According to the regulatory norms, all the firms making an IPO for over Rs 50 lakh need to file a draft offer document with SEBI, which might issue its observations on the offer document within a month from the date of receipt.
However, for a large number of pending IPOs, delay is understood to be because SEBI is yet to get the clarifications it has sought from lead managers of those public issues.
If further clarifications are not sought by SEBI from the merchant bankers, observations could be issued within 15 days of receipt of a satisfactory reply.
According to information available on the SEBI website, clarifications are awaited from lead managers on IPOs of Reliance Power, NHPC, REC, Titagarh Wagons, Gammon Infra Projects, Surya Foods and Agro Ltd and Xenitis Infotech.
Besides, clarifications are also awaited on proposed public issues of Kamayaqni Patients Care, Alkali Metals, Avon Weighing System, Midvalley Entertainment and Vascon Engineers.
In addition, SEBI is currently under process of issuing observations on IPOs of Acme Tele Power, V-guard Industries, Archidply Industries, Neel Metal Products and Globus Spirits among others.