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India Inc is expected to raise over Rs 1 lakh crore (Rs 1 trillion) through share issues by the end of this calendar, the biggest ever in a year.
A back-of-the-envelope calculation suggests that the total mobilisation through share issues (including rights, initial and follow-on issues) will be at least Rs 1.04 lakh crore (Rs 1.04 trillion).
Among sectors, banking and real-estate companies are expected to hit the domestic markets more frequently than companies from other sectors.
State Bank of India plans to raise as much as Rs 6,150 crore ($1.5 billion) selling shares in the coming months.
To meet capital requirements introduced in March, Indian banks need to raise Rs 5,000 crore (Rs 50 billion) by selling shares and bonds during this fiscal alone.
Central Bank of India (Rs 1,000 crore), Syndicate Bank (Rs 600 crore), UTI Bank (Rs 2,460 crore) and HDFC Bank (Rs 4,305 crore) are among the banks that have announced capital raising plans.
June was clearly the busiest month of the year and saw property developer DLF Ltd and India's second largest bank ICICI Bank raising a total of Rs 17,938 crore (Rs 179.38 billion). The fear that a bunching of big issues will result in a sell-off in the markets also proved to be wrong.
Another significant feature this year is the slew of issues lined up for the stringent US markets.
The US markets, which have already seen Indian companies such as Sterlite Industries ($1.75 billion), and WNS Holdings ($224 million) raise capital, is expected to see more issues by India-based firms, including BPOs Genpact, Sutherland and 24/7 Customer.
IPOs by smaller companies Vishal Retail (subscribed 83 times!) and Roman Tarmat (30 times) attracted big investor interest even though the issues coincided with the two big issues, proving once again that good issues will attract interest, whatever may be the situation.
"We see good appetite from overseas investors in large Indian IPOs. In fact, in many cases foreign demand is stronger than local institutional as well as local retail demand. This may be because global investors consider emerging markets as preferred investment destinations these days. If you look at global valuations, emerging market risk premia are at all-time lows, indicating the popularity and lowered risk-perception in the eyes of global investors," said Sanjay Prakash, chief executive officer of HSBC Asset Management (India) Pvt Ltd.
Says S Subramanian, head, investment banking of Enam Financial Consultants Pvt Ltd: "In the current month, domestic companies raised $10 billion worth of funds from Indian and US markets. We (Enam) alone are managing issues worth $7 billion."
The 200-year-old bank's associates, State Bank of Bikaner & Jaipur, State Bank of Travancore and State Bank of Mysore, are also looking to sell shares after the government passed an amendment in the SBI Subsidiary (Amendment) Bill last month.
