Despite not so good primary market activity, fresh capital dominated 88 per cent of the total fund raised through initial public offers by India Inc. in 2009. An increase of 8 per cent compared with last year, said research report by Prime Database.
An IPO is often a combination of fresh equity share on offer by the company and offer for sale by financial institutions that hold stake in the company. The percentage of fresh issue has seen a rise this year against last.
“Fresh capital took 88 per cent share at Rs 17,200 crore of the Rs 19,535 crore raised by corporate sector in the primary market. It was Rs 15,941 crore in the previous year,” said Prithvi Haldia, chairman and managing director of Prime Database.
Offers for sale raised Rs 2,358 crore in 2009, compared to Rs 986 crore in 2008.
“Most of the large companies that entered the market in 2009 were the ones that had been ready for more than a year, and had received SEBI’s approval in 2007-2008 but were not able to enter the market due to poor conditions,” said Haldia.
This included the refilled IPOs of NHPC, Adani Power, JSW Energy, Cox & Kings and Godrej Properties.
Despite a huge rise in the secondary market and rising expectations, the primary market saw only 21 initial public offers in 2009.
The number of issues in 2009 was significantly lower compared with 38 public equity issues 2008 and 106 in 2007. The year 2008 saw India Inc. raise Rs16,927 crore while in 2007, the accrual through primary market had been Rs 45,142 crore.