Fortune of large-sized initial public offerings (IPO) like Adani Power and Future Ventures, India hangs in balance due to the current market turmoil. The proposed IPOs by these companies to rise over Rs 8,000 crore are likely to be postponed, according to some merchant bankers, as the validity of Sebi's approval to the offers, would end in the next few weeks.According to Mr K Srinivas, MD Mumbai-based merchant banking firm Saffron Capital Advisors.
Conditions are extremely non-conducive for IPOs of any reasonable size. Only those companies, which cannot abandon their projects in the middle, will make IPOs in the current market. Primary market conditions will continue to be dull until there is some improvement in valuations in the secondary market.
Conditions are extremely non-conducive for IPOs of any reasonable size. Only those companies, which cannot abandon their projects in the middle, will make IPOs in the current market. Primary market conditions will continue to be dull until there is some improvement in valuations in the secondary market.
In the recent past failures of a few high-profile offers are forcing prospective issuers to take a cautious approach on the primary market, according to the bankers. Even after receiving clearance from Sebi, most of them are unwilling to proceed with their offers due to fears that investors may not respond positively.
Exceedingly bearish secondary market conditions with no sign of recovery since January this year has caused a major hit for fund mobilization through equity public issues. Around Rs 17,000 crore (38 issues) has been raised between January and October 2008, compared with Rs 45,000 crore (106 issues) in 2007, according to Prime Database.
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