June has been a watershed month for the Indian public issue market. Initial public offerings (IPO) and follow-on public offerings (FPO) put together raised a phenomenal Rs.22,503 crore, according to market researcher Prime Database.
“This was nearly double the (previous high of ) Rs 11,403 crore that was raised in March 2004, which incidentally was courtesy the disinvestment offerings. The third highest month was December 2005, which had seen Rs. 6,942 crore being raised,” said Prithvi Haldea, Managing Director the country's premier researcher on primary issues.
The 10 days covering June 14-22 (the closing dates of DLF and ICICI Bank) would be remembered for a long time, for in this period alone, nearly 85 per cent of the month’s amount or Rs 19,250 crore was mobilized.
The current fiscal year is likely to set a new record in total funds raised through public offerings. Within a quarter Rs 23,679 crore were raised, which is roughly equal to Rs 23,675 crore raised in the entire fiscal 2005-06. This is also within the reach of the highest-ever annual mobilization of Rs 24,993 crore seen in 2006-07.
“With a very strong pipeline in place, the current year would easily overtake the preceding fiscal by a significant margin. There are already as many as 68 issues which have either obtained SEBI approval or have filed for approval to collectively raise Rs 14,400 crore,” Haldea said.
This kind of mobilization clearly establishes the arrival of India in the big league of global markets for share issues.
Haldea said the fact that India has become a very lucrative market is evident from the line-up of the world’s top bankers.
"While until the '90s, the market was dominated by domestic bankers, we saw collaborative efforts in the following years, and we are now witnessing the break-ups of collaborations as well as entry of all big international names," he said.
Haldea cautioned against what he called the "absurd behaviour" of measuring the success of an issue by the number of times oversubscribed.
“A Rs 20 crore retail issue oversubscribed by 30 times is considered a huge success while a one-time subscription to a Rs 2,000 crore retail issue is considered to be lukewarm,” he said.