Indian IPO Market Saw Just One Initial - Oct 7, 2008

The Indian IPO market saw just one initial public offering making the mark in September, by wilting under the global financial crisis.

In the past six years, this is the first time during the month of September when the world's largest economy and capital market saw not a single IPO.

The white mineral manufacturer 20 Microns was the only firm in the Indian primary market, which bring out its IPO in September, even as the global crisis continued to take a lead on the local bourses. Though the issue was small received good response from investors that subscribed over four times. The issue price has been fixed at Rs 55 per share, the upper end of the price band.

As per the experts the primary market is witnessing a lull because of the bearish conditions in the secondary market that discouraging the firms to enter the capital markets.

This year US has seen the highest volume ever of IPOs which were withdrawn or postponed. As per Dealogic data, the volume of withdrawn or postponed IPOs from US issuers aggregated to $13.1 billion via 71 deals till August in 2008.

The Dealogic report also stated the global IPO volume reported a fall of 49 per cent to $97.2 billion in the first eights months this year from $188.8 billion in the same period in 2007.

EXCO Partners' IPO is the largest US IPO withdrawn or postponed this year, which was planning to enter the market with a $1.7 billion IPO along with Tommy Hilfiger's $750 million IPO.

According to president of Religare Securities, Amitabh Chakraborty "Certainly primary market is seeing a lull as it is becoming more difficult for companies to raise money in recent times. Given the current uncertainty and volatility we expect that companies which plan to raise large amount of money have to wait for some more period of time till sanity returns to the markets.