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IPOs to take investors' wealth to Rs 100 trillion

business Updated: Jan 07, 2008 16:46 IST
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Dalal Street may soon become an abode for Rs 100 trillion worth of wealth by the virtue of India Inc's capital raising spree from public issues alone, and without much support from the secondary market.

The underlying public issues are currently estimated at around Rs 2,00,000 crore, which includes mostly big-ticket initial public offerings (IPOs). Even with an average dilution of 10 per cent of equity in these IPOs, the public issues could easily add close to Rs 20,00,000 crore to investors' existing wealth, marketmen believe.

This would take the total wealth invested on bourses, measured in terms of cumulative market capitalisation of all the listed companies in India, to close to Rs 100,00,000 crore, from more than Rs 75,00,000 currently.

"The (public issue) pipeline is presently Rs 1,90,000 crore strong," primary market tracking firm Prime Database's Prithvi Haldea said, while adding that a strong issuer pipeline is well accompanied by huge investors' appetite.

However, the success of IPOs depend considerably on the secondary market conditions, the experts believe.

"Secondary market needs to remain stable, if not buoyant, and scam-free. The present conditions continue to offer an excellent opportunity to channelise household savings into the economy through the capital market," Haldea said.

According to Prime Database, capital mobilisation would be over Rs 35,000 crore from 70 public issues alone, for which documents have already been filed with market regulator SEBI, while the year 2008 could see close to Rs 75,000 crore being raised collectively through all public issues plan underway.

Besides, investment bankers are being sounded out by a host of other corporates for their probable IPOs and plans could be put in place soon for these public issues.