Capital market mops up $5.3 bn via IPO route

India's sizzling capital market mopped up a staggering Rs 236.84 billion, the highest ever, through the IPO route.

India's sizzling capital market mopped up a staggering Rs 236.84 billion ($5.3 billion), the highest ever, through the public offering route in fiscal 2005-06, said a study on Wednesday.

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The total mobilisation represented an increase of 11 per cent over previous year's Rs 214.22 billion ($4.8 billion), according to capital market research firm Prime Database.

The capital market saw the launch of 76 initial public offerings (IPOs), which collectively raised Rs 108.08 billion ($2.4 billion) or 45 per cent of the total amount.

The major IPOs during the year were from Suzlon Energy (Rs 14.96 billion), IDFC (Rs 13.72 billion) and Punj Lloyd (Rs 6.42 billion).

"The main reason for the good performance of the primary market was the buoyant secondary market almost throughout the year," said Prithvi Haldea, managing director of Prime Database.

"The economic resurgence and the stable political climate only further helped the scenario," he added.

Massive investment inflows in Asia's second fastest growing economy after neighbouring China on hopes of sustained higher economic growth and corporate earnings is helping the key index to scale new peaks almost on a regular basis.

According to Prime, follow-on public offerings by listed companies dominated the market in the last fiscal year, witnessing a huge increase and cornering 55 per cent of the total mobilisation.

Compared to six such offerings with a total mobilisation of Rs 67.69 billion ($1.5 billion) in the fiscal year 2004-05, the last fiscal year witnessed as many as 26 listed companies raising a total of Rs 128.76 billion ($2.9 billion).

The major follow-on public offerings during the year were from ICICI Bank (Rs 57.50 billion), Bank of Baroda (Rs 16.33 billion) and Oriental Bank of Commerce (Rs 14.50 billion).