Firms raise funds worth Rs 1,019 crore via IPO in first half of FY15

A little over Rs 1,000 crore was raised through initial public offers in the first half of current financial year reflecting how the IPO market has been unable to match the bullish sentiment in the overall equity market space.

However, Prime Database Managing Director Pranav Haldea said that a flurry of IPOs are expected in the remaining part of 2014-15, especially in the fourth quarter.

According to Prime Database, as many as 25 companies collectively mopped up a meagre Rs 1,019 crore through IPOs during the April-September period of the FY15.

This was in comparison to Rs 1,050 crore raked in by 16 firms in the six-month period ended September 30 in the previous financial year (FY14).

Significantly, of the 25 IPOs in the first half of the current financial year, 21 were from the Small and Medium Enterprise (SME) sector.

There were only four non-SME IPOs, which totalled Rs 851 crore.

However, these accounted for 84 per cent of the total mobilisation.

The largest main board IPO was that of Sharda Cropchem (Rs 352 crore), while the largest SME public offer was that of Momai Apparels (Rs 30 crore).

"... Even though a bullish sentiment has prevailed in the market, because very few predicted a landslide victory for NDA of the sort which was witnessed and because the IPO process is time consuming, there will be a lag of a few months before large ticket IPOs hit the market," Haldea said.

At present, five companies are planning to raise Rs 1,240 crore and are holding the Securities and Exchange Board of India's (Sebi) approval. Another 11 firms intending to mop up Rs 4,707 crore have filed draft documents with capital market watchdog and are awaiting its approval.

"Many more filings are likely to be seen and a flurry of IPOs are expected in the balance part of this fiscal, especially Q4," Haldea said.

"The sentiment has received a further boost with overwhelming response, both in terms of over-subscription as well as in terms of listing gains, to the four main board IPOs of the year," the Prime Database MD added.

According to the information management specialist, "There is some disappointment though on the divestment front, despite a huge target of Rs 58,425 crore for the current financial year and continuing announcements, with half the year already gone, no action has been seen."

The pipeline of divestment/PSU offerings continues to become larger by the day yet none of it has materialised.

Several issues have been announced and then delayed.

"However, the target is expected to be achieved this year with some big disinvestment lined up including that of ONGC, Coal India, SAIL, NHPC, PFC, REC, etc," Haldea said.

The report said that a total of Rs 2,593 crore was raised through the Offer for Sale (OFS) mechanism in the first half of the current fiscal.