Companies line up IPOs worth Rs 15,000 crore

Eye business expansion, fulfil working capital requirements and making loan repayments

The IPO lane is getting increasingly crowded as companies have lined up offers worth more than Rs 15,000 crore in the current fiscal to fund their business expansion, meet working capital requirements and make loan repayments.

Dilip Buildcon, New Delhi Centre for Sight, Ujjivan Financial Services, Quess Corp, Hinduja Leyland Finance and Seaways Shipping and Logistics are among the ones that plan to launch share-sale offers in the coming months.

At present, 25 companies plan to raise Rs 12,500 crore (Rs 125 billion) and have secured approval of the Securities and Exchange Board of India (Sebi), Prime Database Managing Director Pranav Haldea said.

Another six firms looking to mop up Rs 3,000 crore (Rs 30 billion) have filed draft documents with the capital market watchdog and are awaiting approval, he added.

Besides, many more filings are expected in the near future.

Proceeds of the IPO will be used to fund business expansion plans, to meet working capital requirements and to repay loan and for other general corporate purposes.

According to experts, the IPO market is expected to see some activity in the current fiscal as half a dozen companies have filed their draft papers with Sebi in the last three months (January-March) to launch public offers.

Seven firms - Equitas Holdings, Infibeam Incorporation, Bharat Wire Ropes, HealthCare Global Enterprises, Quick Heal Technologies, TeamLease Services and Precision Camshafts - have come out with IPOs this year.

During the just-ended 2015-16, fund-raising through IPOs came in at Rs 14,461 crore (Rs 144.61 billion), making it the highest in the last five financial years. In comparison, Rs 2,770 crore (Rs 27.7 billion) were mobilised in 2014-15.

The past fiscal year also witnessed a flurry of activity on the small and medium enterprise (SME) platform as there were as many as 50 SME IPOs that mobilised Rs 311 crore. In 2014-15, 38 IPOs mopped up Rs 250 crore (Rs 2.5 billion).

Marketmen said an 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.

Illustration: Uttam Ghosh/Rediff.com