Indian cos garner Rs 6,000 cr through IPOs

Indian companies mopped-up over Rs 6,000 crore (Rs 60 billion) during fiscal 2012-13 through initial public offerings, a marginal rise of four per cent from the past year.

A total of 10 companies collectively managed to garner Rs 6,059 crore (Rs 60.59 billion) through their IPOs during the fiscal year ended March 31, 2013, shows an analysis of data available with the stock exchanges.

This marks a slight increase of four per cent from the total funds raised through IPOs during the previous fiscal, 2011-12, when 33 companies had together mopped-up Rs 5,808 crore (Rs 58.08 billion).

In 2010-11, a total of Rs 33,183-crore (Rs 331.83-billion) worth capital was raised by 52 firms through their IPOs.

Most of the IPOs that hit the capital market in the current fiscal were smaller in size (less than Rs 1,000 crore or Rs 10 billion) and some companies even withdrew their offers after poor response.

Besides, many companies did not launch their offers after doing all the groundwork and obtaining the necessary approvals.

Bharti Infratel, the tower arm of telecom giant Bharti Airtel, came out with the largest public issue of the year when it hit the capital market to raise Rs 4,118 crore. This was also the biggest IPO since October 2010, when state-run Coal India had garnered Rs 15,475 crore (Rs 154.75 billion). Interestingly, there were three jewellery firms -- PC Jewellers, Tribhovandas Bhimji Zaveri and Tara Jewels -- that entered the capital market this fiscal.

Three firms -- retailer Sai Silk, packaging firm Plastene India Ltd and component supplier to automotive industry Samvardhana Motherson Finance Ltd -- withdrew their offers, collectively worth Rs 1,832 crore (Rs 18.32 billion), due to poor response.

Among the major IPOs of the year, PC Jewellers raked in Rs 609 crore (Rs 6.09 billion) and rating agency CARE garnered Rs 504 crore (Rs 5.04 billion). Housing finance company Repco Home Finance was the sole state-owned firm to enter the capital market through IPO route during 2012-13. Repco Home Finance raised about Rs 270 crore (Rs 2.7 billion)

through its public offer.

Other IPOs included Tribhovandas Bhimji Zaveri Ltd (Rs 200 crore or Rs 2 billion), Tara Jewels (Rs 170 crore or Rs 1.7 billion), VKS Projects (Rs 55 crore or Rs 550 million), MT Educare (Rs 35 crore or Rs 350 million), Speciality Restaurants Ltd (Rs 26.41 crore or Rs 264.1 million) and V-Mart Retail (Rs 26.25 crore or Rs 262.5 million).

Most of these companies plan to use the proceeds for expansion work and other general corporate purposes.

Notably, fewer companies have entered the capital market compared to past year.

The companies were averse to hitting the market because of the volatile market conditions as well as the fact that firms that did implement their public stake sale plans are not doing well, market experts said.

"There were many factors for avoiding the IPO route to raise funds, firstly domestic and global market were not very conducive and many companies that entered the secondary market have been trading below the issue price," Geojit BNP Paribas Financial Services Research Head Alex Mathews said.

He further said that the government has also offloaded its stake in many companies through Offer-for Sale route, which means investors have lot of options.

Moreover, three firms namely Jyoti CNC Automation, BSCPL Infrastructure and Ortel Communications -- have filed their draft documents with capital market regulator Securities and Exchange Board of India to raise funds through IPO since the beginning of the calendar year 2013.

Besides, Bharat Business Channel, direct to home TV arm of Videocon Group, has already received the go-ahead from Sebi for its proposed Rs 700 crore (Rs 7 billion) IPO.