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Indian companies line up Rs20,000 crore IPOs

LiveMint logoLiveMint 26-03-2017 PTI

New Delhi: The initial public offer (IPO) lane is getting busy as companies have lined up initial public offerings worth Rs20,000 crore in the coming months to fund their business expansion and meet working capital requirements.

Hudco, NSE, Central Depository Services Ltd, Nakshatra World and Cochin Shipyard are among the names that plan to launch share sale offers in coming months. Most of these companies plan to utilise IPO proceeds for business expansion as well as working capital requirements.

Besides, the firms are taking IPO route to achieve benefits of listing the equity shares on the bourses. Some of the firms believe the listing of the equity shares will enhance their brand name and provide liquidity to the existing shareholders. At present, five companies—Hudco, Central Depository Services Ltd, S. Chand and Company, Genesis Colors and Security & Intelligence Services (India) Ltd—have secured Securities and Exchange Board of India’s (Sebi) go-ahead to float their respective public offers.

In addition, 11 companies including GTPL Hathway, NSE, Bharat Road Network, Tejas Networks, Eris Lifesciences, Salasar Techno Engineering, Au Financiers, Prataap Snacks, PSP Projects are awaiting the regulator’s approval to float IPOs. Together, these companies are expected to raise about Rs20,000 crore.

Moreover, companies like SBI Life Insurance are expected to file IPO papers in the near future. Besides, five companies including leading bourse BSE and Avenue Supermarts, the operator of retail chain D-Mart, have already hit the Dalal Streets this year so far.

NSE’s IPO will see existing shareholders offloading 20-25% shares to the public through the offer for sale (OFS) route. It is expected to be one of the biggest in recent times, with an estimated size of over Rs10,000 crore, people aware of details said.

According to experts, the IPO market is expected to see some activity this year as half a dozen companies have filed their draft papers with Sebi in 2017 so far to launch public offers and many are awaiting the regulator’s nod. Also, proactive regulatory environment coupled with general uplift in investor sentiment has helped the IPO market.

Market watchdog Sebi has taken numerous steps that are encouraging companies to sell shares. One key enabler was making Asba (application supported by blocked amount) mandatory for all investors, including retail. Also, Sebi’s proactive approach to the market has ensured that investors need not fear about frauds.

Quantum AMC director I.V. Subramaniam said, “Attractively priced IPO will get a solid response from investors as its chances of listing with gains get higher. Conversely, if an IPO is over-priced, it may not be able to list attractively”.

The year 2016 saw 26 companies collectively raising over Rs26,000 crore trough their respective IPOs, making it the best in six years.

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