2011 could see cos raising about Rs. 90k Crore via IPOs
Tuesday, 28 December 2010, 19:59 IST
By SiliconIndia
By SiliconIndia
Mumbai: The year 2010 saw many successful Initial Public Offers (IPO), with Coal India leading the pack. Now it seems likely that the coming year will also ring in success for IPOs with an estimated Rs. 90,000 crore to be raised from over 100 public offers. This money would come from government divestments, follow-on offers and IPOs from companies.
According to a report by SMC Global Securities, this year, over Rs. 59,500 crore was raised through public offers, with Coal India's share accounting for Rs. 15,500 crore. The report said, "One can expect public issue robustness even during the calendar year 2011, if the market conditions remain strong. The pipeline is indicating the total public issue volume of about Rs. 90,000 crore during the calendar year 2011."
The Rs. 90,000 crore is expected to be divided between private and government owned companies. The former will raise about Rs. 50,000 crore while the government companies would raise around Rs. 40,000 crore.
Market regulator SEBI has already given its nod to 35 offerings to launch offers, with 65 in the offing. The largest IPO is expected from Jindal Power with a proposed amount of Rs. 7,200 crore. This is followed by Rs. 5,000 crore offering from Reliance Infra Tel.
Market players opine that provided market conditions are favorable, 2011 could see the number of public offers go above what is estimated with more than Rs. 1 lakh crore mobilization mark. Veterans warned that the euphoria should also make people cautious.
Arun Kejriwal, Director, KRIS said, "Three types of people will tap the market: the government, the good promoters and the unscrupulous promoters. I'm worried about the bad promoters tapping the market and spoiling the hard work done by the good ones and the government. If that happens, the quality of IPOs will suffer and may weigh on the good ones."
As a cautionary step, market players opined that the SEBI proposal, to go into the track record of merchant bankers, if implemented, could be better for the market for public offers.
According to a report by SMC Global Securities, this year, over Rs. 59,500 crore was raised through public offers, with Coal India's share accounting for Rs. 15,500 crore. The report said, "One can expect public issue robustness even during the calendar year 2011, if the market conditions remain strong. The pipeline is indicating the total public issue volume of about Rs. 90,000 crore during the calendar year 2011."
The Rs. 90,000 crore is expected to be divided between private and government owned companies. The former will raise about Rs. 50,000 crore while the government companies would raise around Rs. 40,000 crore.
Market regulator SEBI has already given its nod to 35 offerings to launch offers, with 65 in the offing. The largest IPO is expected from Jindal Power with a proposed amount of Rs. 7,200 crore. This is followed by Rs. 5,000 crore offering from Reliance Infra Tel.
Market players opine that provided market conditions are favorable, 2011 could see the number of public offers go above what is estimated with more than Rs. 1 lakh crore mobilization mark. Veterans warned that the euphoria should also make people cautious.
Arun Kejriwal, Director, KRIS said, "Three types of people will tap the market: the government, the good promoters and the unscrupulous promoters. I'm worried about the bad promoters tapping the market and spoiling the hard work done by the good ones and the government. If that happens, the quality of IPOs will suffer and may weigh on the good ones."
As a cautionary step, market players opined that the SEBI proposal, to go into the track record of merchant bankers, if implemented, could be better for the market for public offers.
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