Buoyed by the bull-run on domestic bourses, more than 100 companies are planning to mop up funds from the capital markets in the next two months.
According to the data available with market regulator Securities and Exchange Board of India (SEBI), 73 companies have already filed their prospectuses for public issues, including the large initial public offerings (IPO) of Reliance Power and Emaar MGF.
While both offers are together expected to raise around Rs 18,500 crore in November, Tata Steel is expected to raise Rs 9,654 crore through a rights issue.
Most of the companies that are lining up floats are primarily from sectors like infrastructure and real estate, pharmaceuticals, power and financial services.
While the public floats of realty companies Manjeera Constructions and Afcons Infrastructure are likely immediately, others around the corner include Anu’s Laboratories, National Hydroelectric Power Corporation, Parabolic Drugs, Religare Enterprises and TCG Lifesciences. Other big names joining in soon are Kishore Biyani’s Future Capital, Edelweiss, Wockhardt Hospital, and the Multi Commodity Exchange. Apart from the IPOs, 27 fixed-price issues are awaiting the regulator’s green signal.
With the equity markets on a roll, companies clearly prefer the public float route to private equity partners (PE), since floats offer the desired freedom for company managements. “The markets are at a peak and it will be easier for companies to raise risk-free money through public issues, as against private equity or venture capital funding, which would limit the management’s freedom as well," said a Mumbai-based merchant banker.
Just ten months into calendar 2007, 87 companies have already raised capital through IPOs, compared with 88 a year ago.
So far this year, PEs have invested over $13.5 billion in India, almost double the $7.46 billion in 2006. Equity markets in the country have seen high activity with foreign investors pumping in a record $16.5 billion in 2007 till date (Rs 68, 701.80 crore), compared with the $10.7 billion (Rs 47,181.20 crore) in 2005.