Indian firms’ fund raising at 5-mth low
Indian companies mopped up Rs. 63 crore through public and rights issue of shares in June 2012. This was the lowest amount of capital raised since February, when companies had raked in Rs. 792 crore.business Updated: Aug 16, 2012 00:43 IST
Indian companies mopped up Rs. 63 crore through public and rights issue of shares in June 2012. This was the lowest amount of capital raised since February, when companies had raked in Rs. 792 crore.
According to data available with market regulator the Securities Exchange Board of India (SEBI), Indian companies raised Rs. 63 crore through two Initial Public Offerings (IPOs)."The amount raised through IPOs during June 2012 include one IPO worth Rs. 8 crore listed on SME platform," Sebi said.
However, Sebi did not divulge the names of thecompanies which had raised funds, but, as per information available with the stock exchanges, VKS Projects Ltd had entered the capital market with an issue size of Rs. 55 crore in June.
In May, companies had raised a total of Rs. 247 crore that includes Rs. 188 crore through IPOs and remaining Rs. 58 crore through rights issue route.
“...Amount raised in the primary market through public and rights issues during the month decreased by 74.4% from Rs. 246 crore in May 2012 to Rs. 63 crore in June 2012,” said SEBI.
Market experts believe investor appetite for IPOs is low in a weak secondary market. So, many companies are avoiding this route for fund-raising despite SEBI’s approval. Besides, some firms have shelved IPO plans due to poor response from investors.
In May, packaging materials maker Plastene India and auto parts manufacturer Samvardhana Motherson Finance had shelved their IPOs.
The total cumulative mobilisation for the current fiscal so far stands at Rs. 509 crore against Rs. 8,000 crore year-on-year