The mega initial public offers of Tata Consultancy Services, NTPC and Hutch may prop up the equities market to over 5,500 mark by the end of this year, according to market analysts.

TCS' offering of 6.37 crore (63.7 million) shares to the public valued at about Rs 6,000 crore (Rs 60 billion) is slated to be the biggest in the history of Indian capital market.

The previous mega IPOs were of Reliance Petroleum [Rs 2,200 crore (Rs 22 billion)] in 1993, IDBI [Rs 2,164 crore (Rs 21.64 billion)] in 1995, Bharti Televentures [Rs 750 crore (Rs 7.50 billion)] in 2001, and Maruti (Rs 750 crore) in 2003.

ONGC's second public offer of Rs 10,500 crore (Rs 105 billion) is still the biggest issue but it was not an IPO. So was Gail's Rs 1,500 crore (Rs 15 billion) offering last fiscal.

"TCS and NTPC are going to be very good issues. But IPOs alone cannot be the reason for the revival of the market," Cholamandalam AMC CEO Sashi Krishnan told PTI in New Delhi.

He, however, warned that these mega IPOs can remove liquidity from the market. Morever, mutual funds may have to reallocate their assets after the mega issues, he added.

Going by Prime Database, mega IPOs of Bharti in 2001, Punjab National Bank in 2002 and Maruti in 2003 had propped up the market in the respective years.
 
TCS is likely to be the trendsetter for other companies to line up with their offerings in the primary equity market this year, analysts said.

The IPOs of TCS, NTPC, Hutch and other private companies are expected to push up market sentiments and the BSE Sensex to over 5,500 mark within a few months from the present level of 4,800, Cholamandalam chief investment officer Tridib Pathak said.

The three mega offers of TCS, NTPC and Hutch are expected to mobilise Rs 16,000 crore (Rs 160 billion) from the market.

Funds raised through public offers have shown a sharp rise last year from a brief lull in 2002-03.

According to analysts, companies raised about Rs 19,000 crore (Rs 190 billion) through public offers in 2003-04, Rs 5,700 crore (Rs 57 billion) in 2002-03, Rs 6,400 crore (Rs 64 billion) in 2001-02 and Rs 6,600 crore (Rs 66 billion) in 2000-01.

The average size of IPOs is also expected to increase in this fiscal after mega offers of TCS, NTPC and Hutch.

"The average size of the public offers has shown an upward trend in the last few years. This was mainly due to one or two mega offers," analysts said.

The average offer size was Rs 53 crore (Rs 530 million) in 2000-01, which went up to Rs 338 crore (Rs 3,380 million) in 2001-02 due to Bharti's IPO, and further rose to Rs 409 crore (Rs 4,090 million) in 2002-03 and Rs 558 crore (Rs 5,580 million) in 2003-04.