Government Holds Oil India Postpones IPO To Next Fiscal - Dec 23, 2008

Initial Public Offer of Oil India Ltd has been put off to the next fiscal on account of unstable market conditions. The nation's second biggest state-run oil and gas explorer was to launch its IPO of 2.64 crore equity shares on November 10 as per the earlier schedule. However, the turnaround of fortunes on the stock markets led to its deferment by a few weeks. It now has been put back for at least a couple of months.

According to the OIL Director (Finance) S Ananthkumar, Market is volatile and conditions bad for an IPO. We do not think we can go ahead with the plans under such a scenario. We are closely watching the market conditions. Whenever it appears that the market has stabilized, we will launch it. OIL has capital market regulator SEBI's approval, valid till September 10, 2009. IPO timing will have to be reworked in consultations with the government.

The government holds 98.13 per cent stake in OIL, which produces nearly four million tonnes of crude oil yearly. Together with the IPO, government is to sell 10 per cent of its current holdings in OIL to Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum.

IPO Activity In May Lose Steam Witnessed A Dramatic Fall In Volume - Dec 22, 2008

New Delhi: Initial public offerings, which had been the stars in the bull market last year have lost their attraction this year and are likely to face bleak days ahead in 2009. Dalal Street, which saw a mega offering by Anil Ambani Group firm Reliance Power hitting the capital markets this year, fell prey to the bears with the benchmark index Sensex plunging by over 10,000 points from its peak in January. IPO activity in 2008 witnessed a dramatic fall in volume, which declined nearly 51 per cent to around Rs 19,360 crore this year as against nearly Rs 40,000 crore at the end of 2007, as per data compiled by NexGen Capitals, the merchant-banking arm of brokerage firm SMC Global Securities.

However, the decline in volume would have been sharper if Reliance Power's mega offering of close to Rs 12,000 crore is excluded from the IPOs in 2008 (till December 10).Analysing the sharp downturn in the primary markets due to the bearish trends in the secondary market, most experts believe 2009 would be a difficult year and prospects for new issues remain weak. Echoing the sentiment, global consultancy KPMG's head of the private equity department, Vikram Uttamsingh, said the meltdown in the stock markets has led to dwindling offers in the primary market, which would be more pronounced in the coming year.

Mandatory Ipo Grading Will Continue The Compulsory - Dec 18, 2008

Security and Exchange Board of India (SEBI), has decided to continue the compulsory grading of IPOs. Earlier, it was determined that the decision would be reviewed as per the experience gained. There were doubts on the significance of the present system as the grading does not reflect in the performance of these issues in the markets.

According to a source, they have decided to maintain a status quo that is to continue to have a mandatory grading for IPOs. As per the members of the Primary Market Advisory Committee (PMAC), the decision is taken as it is too early to come to a conclusion on the effectiveness of the present policy of mandatory IPO grading.

However, many analysts believe that mandatory grading requires modification since grading does not reflect in the performance of issues in the market.SEBI had made grading mandatory for all IPOs where draft offer documents filed with the regulator on or after May 1, 2007, and made issuers accountable for the cost of grading. After that, about 100 IPOs have been graded by credit rating agencies.

Public Gain Loss Ratio Of Ipos In Last 5 Years At 1:4 - Dec 15, 2008

Initial public offerings (IPOs) ratio of gain-loss stood at 1:4 in last 5 years as analysis of 257 IPOs, which were launched during the last five years, showed that investors have lost money in the 204, while in balance 53 investors are still in the profit. This is despite the current turmoil in the market, which has shaved about 55% off the BSE Sensex in the last 11 months.

The IPOs showing profit are Educomp Solutions and Indiabulls Financial Services, which have given over 1,000% return since their respective IPOs, after adjusting for bonus, split, demerger of businesses etc. Apart from these two, there are nine stocks, which have at least doubled investors' money since IPO.

Gemini Engi Fab Ltd Files Draft Red Prospectus For IPO - Dec 12, 2008

Gemini Engi-Fab Ltd, a Mumbai based manufacturer of industrial fabrication related products has filed a draft red herring prospectus with SEBI for an initial public offering of 55 lacs equity shares of Rs 10 each. The price will be decided through 100 per cent book-building process. The shares will be listed on BSE and NSE.

The issue comprises of a net issue of 27.5 lacs shares of Rs 10 each to public, out of which 5 per cent that is 1,37,500 shares will be allocated to mutual funds and remaining will be allotted to qualified intuitional buyers. Almondz Global Securities is appointed as a book running lead manager and Karvy Computershare as registrar to the issue.

The company wants fund to set up a new manufacturing unit at Umbergaon, Gujarat. This facility would have better machinery like a plate bending machine, a tube sheet drilling machine, SAW machines with motorized rotators and electrically operated cranes which will not only help to handle larger material but also to work on it with better precision. This facility would also handle more equipment with a larger work space.

IPO Validity Extended From Three Months To One Year - Dec 11, 2008

SEBI on December 04 granted bigger flexibility to corporates for their fund-raising plans and also outlined measures to prevent the panic redemptions. Market regulator has approved a proposal to extend the validity of an initial public offering (IPO) approval from three months to one year, on requests from issuers. According to the prior rule, companies had to launch their IPOs within three months of securing SEBI's approval. For any reason failure to complete the offering would have meant approaching the SEBI for a new approval.

For many companies the new rule brings great relief, who were earlier forced to defer their IPOs even after obtaining SEBI approval. Under the new rule, these companies can go public within one year of receiving the regulator's approval. However, SEBI has also specified that companies will have to update the document with fresh numbers and any other material changes whenever required.

Govt Wants To Complete Due Diligence For IPO Launch - Dec 11, 2008

The Department of Disinvestment (DoD) has instructed public sector undertakings (PSUs), looking to raise funds from the capital market, to sort out administrative issues and complete their due diligence processes. In order to ensure that time structure to make offer in the capital market, will not clash with each other, the department will specify a time frame for each company.

According to a senior DoD official, "We're ready with IPOs of Oil India and National Hydroelectric Power (NHPC). The other PSUs have been directed to expedite their due diligence process so that they do not face any hitch while filing the red herring prospectus (RHP) with the Securities & Exchange Board of India (Sebi). This will help in streamlining the whole process and determining which PSU should be allowed to tap the market first.The government also wants PSUs and their administrative ministries to solve differences with employees to ensure that there is no difficulty during filing the prospectus.