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Primary market set to witness huge inflows :

The primary market is set to witness a revival in the coming months with initial public offerings, IPOs of industry heavy weights expected to hit the markets. Markets have recovered from the mayhem in May and most companies have now considered floating their IPOs. This means that a huge amount of money will enter the capital markets, reports The Hindu Business Line.

Around 58 issues are yet to receive approval from Sebi. "These companies will raise as much as Rs 18,000 crore (Rs 180 billion)," said Prithvi Haldea, managing director, Prime Database.

Capital funds

  • Around 58 issues are yet to receive approval from Sebi.
  • `The IPO of DLF alone will raise Rs 13,000 crore.'
  • `Around Rs 4,200 crore will be raised through IPOs of 22 cos which have received Sebi approval.

The IPO of DLF alone will raise Rs 13,000 crore (Rs 130 billion).

The fundamentally good companies awaiting approval include DLF, Lanco Infratech, Sobha Developers and Orbit Corporation," he added.

"Around Rs 4,200 crore (Rs 42 billion) will be raised through IPOs of 22 companies which have received approval from the Securities and Exchange Board of India. Out of these, the big ones include Power Finance Corporation, which would raise Rs 1,500 crore (Rs 15 billion), Parsvanath Developers to raise Rs 1,000 crore (Rs 10 billion) and Multi Commodities Exchange, MCX with an issue size of Rs 300 crore (Rs 3 billion)," said Haldea.

The fate of the IPOs will be a function of the state of the security market, pricing of the issue and fundamentals of the company.

"If the issue is rightly priced according to investors, it will work and if it is priced to suit the merchant bankers, it will fail," said Ketan Karani, vice-president, research, Kotak Private Client Group, Kotak Securities.

BSE, Cairn Energy and two arms of Tata Motors are expected to go the public way.

According to analysts, these issues will be huge in terms of the amount they propose to raise. However, the recent issues of GMR Infrastructure and Tech Mahindra, though oversubscribed, saw the retail quotient being highly under-subscribed

Retail investors still have to come back strongly, post the crash, say analysts. In recent times, the IPO of Reliance Petroleum has been the most successful.

2006-08-24 09:45 Source :

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