By IANS,
Mumbai : With Indian equities markets expected to end the year as one of the worst faring bourses among emerging economies, companies proposing to raise funds through a public issue are keeping their plans in abeyance, a survey revealed Monday.
Till Nov 25, the 30-scrip benchmark index of the Bombay Stock Exchange (BSE) had lost over 23 percent this year, as a combination of domestic and global economic woes. This led to investors exiting the markets in droves.
“The ongoing turmoil in capital markets has been impacting initial public offers (IPOs) markets severely. The bad mood of capital markets has led 25 companies to call off their IPOs during this 2011 calendar year,” said Jagannadham Thunuguntla, head of research in brokerage firm SMC Global Securities.
“The probable amount that these 25 companies were planning to raise was to an aggregate of Rs.31,000 crore,” added Thunuguntla.
All these 25 companies had valid approvals from the Securities and Exchange Board of India (SEBI) but chose not to go to the public when investor sentiments were at a low.
These firms were largely related to the real estate and power sector. Some of the real estate companies which did not proceed with their IPOs include: Lodha Developers, Ambiance Real Estate, Kumar Urban Developers, Neptune Developers, BPTP, Raheja Universal and Lavasa Corporation.
The list of power companies that called off IPOs included Sterlite Energy, Jindal Power, Avantha Power, and IND Bharat Power Infra.
“Besides these companies, a few companies have already announced IPO deferrals even though approval for SEBI validity for their IPOs still remain. For instance, Micromax has already announced IPO deferral, owing to the market conditions,” said Thunuguntla.
Looking at the negativity in the markets, the government too has put its disinvestment programme in state-run firms on hold.
“This trend in IPO market will impact the Indian corporate’s fund raising ability to finance their expansion projects, resulting in slowdown in capacity building and job creation,” Thunuguntla said.