Skip to main content

Back on track: IPO mkt recovers

NEW DELHI: The recent decision of the Securities and Exchange Board of India (SEBI) to cut the timeline for rights issues and change the pricing rules will enable India to improve its ratings in the global IPO market, industry players feel. SEBI recently reduced the duration for a rights issue from 109 days to 43 days.

India was in the fifth position in the global IPO market, raising around $4.3-billion from 32 deals so far this year. The only other Asian country in the top five is China, which came second, raising $15.6 billion from 94 IPOs, according the media.

The ranking indicates that India's IPO market has managed to recover after some companies such as Wockhardt Hospitals and Emaar MGF pulled out their public offerings due to inadequate response. Global IPO volumes have dipped by 51.3% so far this year, reaching around $87-billion from 403 issues.

The United States tops the global IPO list, with Saudi Arabia and Brazil at the third and fourth spot, respectively. This year, the Dalal Street is expected to see 55 more IPOs, which may raise around $18 billion. Around 118 follow-on public offers (FPO) are also expected, raising proceeds around $17-billion. Analysts believe investment bankers' ability to raise money even in the volatile market will boost companies tapping the market.

"From a regulatory standpoint, the two decisions that Sebi has made with respect to minimum price for QIP and shortening the rights issue timeline are progressive. These will help issuance in current volatile markets and may further heighten the activity in the equity capital market. The industry is now looking forward to pricing relaxation for ADR, GDR and FCCBs. Increasing the validity period for SEBIcomments from existing three months will also help the IPOs of unlisted companies," said Sanjay Sharma, MD, Deutsche Equities India.

The biggest IPO that may hit the Indian market this year could be GIFTCL raising around $ 2 billion, followed by ICICI Venture with $1.5 billion. While there may be follow-on offers (FPO) from companies such as Essar Oil, Ranbaxy, Suzlon Energy, Hindalco Industries and Tata Motors, raising nearly $7 billion. "Due to volatility, companies are not sure when their issue hits the market. The new guidelines will provide them some sense of security and it cannot be ruled out that we may see more companies coming out with initial or follow-on offers," said Sunil Sinha, senior economist at Crisil.

Popular posts from this blog

Bio-fuel has top investors powered up

23RD ,JUNE India's fortune-hunters believe their new-found love for biofuel will pay off. India's well-known investors who are known for their Midas touch have spotted an opportunity in bio-fuel, betting big on ethanol, bio-mass and even bio-fuel equipment makers in India and other parts of the globe. Billionaires Rakesh Jhunjhunwala, C Sivasankaran, Vinod Khosla, founder of Sun Microsystems, and Nemish Shah, the media-shy joint partner of Enam Financial Services, are investing in bio-fuel makers quietly, expecting that bio-fuel will have a big play in the coming years as the world looks for a viable alternative to the fast depleting oil reserves. Jhunjhunwala, who is known for his ability to spot a multi-bagger at a very early stage, recently invested in Hyderabad-based bio-fuel firm Nandan Biometrics.He is also a 10 per cent stakeholder in Praj Industries, which is a bio-fuel technology provider…

up to 8,500% return in 5 years! Investors made a killing in these 30 smallcap stocks

U By Rahul Oberoi, | Updated: Dec 01, 2017, 04.06 PM IST Post a Comment
Efficiency pays in the long run. Among the top smallcap plays on Dalal Street, 30 companies with stable return on equity (RoE) and return on capital employed (RoCE) have surged up to 8,500 per cent over the past five years.

All these companies had a debt-to-equity ratio of less than 1 and have been maintaining RoE and RoCE of over 20 per cent since 2012-13.

Avanti Feeds emerged the chart topper, with an 8,527 per cent gain to Rs 2,596.60 as of November 28 from Rs 30.10 ..

ovember 28 from Rs 30.10 on November 27, 2012. The company’s return on equity for FY17, FY16, FY15, FY14 and FY13 stood at 42.65 per cent, 46.21 per cent, 52.41 per cent, 45.79 per cent and 27.60 per cent, respectively. Avanti also managed to achieve a return on capital employed of over 50 per cent in last four years. Its RoCE stood at 28.59 per cent inRoE measures net income earned for every rupee of shareholder funds, while…

5 dark-horse picks

Kwadrat/ Kwadrat/
If you are a conservative investor, using the mutual fund route is the best way to invest in stocks. But if you are game for some excitement, you might want to dabble directly in stocks, especially small-cap stocks. Stocks that are smaller in size, in terms of market capitalisation, carry higher risk. The reasons are — one, lower traded volume increases price volatility, two, information is usually scarce on these companies, three, business risk is higher since many of these companies are dependent on a single product and four, governance risk is also higher in these stocks. That said, small-cap stocks have the capacity to deliver far greater returns when compared to large-cap stocks. Sample this: there were 16 stocks with market cap more than ₹50,000 crore in January 2009. These stocks delivered an average return of 138 per cent in the last eight years but 4 out of every 10 stocks in this group delivered negative returns. On the ot…