Despite hiccups, a solid year for public issues
In a volatile financial year that saw India's premier index, the Bombay Stock Exchange Sensex yo-yo from a low of 16,002 on May 25 to 21,004 on November 5, public share issues mobilised Rs 46,267 crore in 2010-11.business Updated: Mar 29, 2011 01:35 IST
In a volatile financial year that saw India's premier index, the Bombay Stock Exchange Sensex yo-yo from a low of 16,002 on May 25 to 21,004 on November 5, public share issues mobilised Rs 46,267 crore in 2010-11. This is the third highest ever collection, only lagging IPO and FPO collections in 2007-08 and 2009-10.
The highest amount raised in a year in public offerings was Rs 52,219 crore in 2007-08.
"The mobilisation in the year could have been higher but for the deferment of some large PSU offerings and the continuing volatility in the secondary market, especially in the last quarter; compared to Rs 29,514 crore raised in the 3rd quarter, the 4th quarter yielded only Rs 4,468 crore," said Prithvi Haldea, chairman and MD, Prime Database.The year witnessed strong primary market activity by the PSUs and PSU banks that accounted for a total raising of Rs 27,537 crore or 60% of the total amount — compared to Rs 31,082 crore raised in 2009-10.
Coal India raised Rs 15,199 crore — 33% of the total money raised in the primary market. Seven PSUs raised funds through public issues during the year.
According to Prime Database, there were 57 public issues in 2010-11, compared to 44 in the preceding year. This included 52 IPOs and 5 FPOs.
The average deal size for the year was Rs 811 crore, down from Rs 1,067 crore in 2009-10.
During the year only Rs 21,065 crore was raised through fresh capital while the remaining Rs 25,201 crore were raised through offers for sale (proceeds go to the seller — government, promoters, venture funds and investors, not to the company).
As the markets remained strong in the first three quarters the issues witnessed good response. As many as 35 issues were oversubscribed by more than 3 times (including the Coal India's IPO, which got oversubscribed by 15 times).