With Sensex on fire more IPOs in pipeline: E

New Delhi, Apr 3 (UNI) With the Sensex on fire, the IPO market in India, along with Brazil, South Korea and Middle East will also see an increased interest in 2006, an Ernst&Young report has said.

''The outlook for IPOs in 2006 shows an increased interest in markets including the Middle East, South Korea, India and Brazil,'' Accelerating Growth, the third annual Global IPO Report released today by Ernst&Young said.

No fewer than 29 countries - including Brazil, Egypt, Greece, India, Israel, Kazakhstan, Malaysia, Poland, Saudi Arabia, South Korea and the UAE - each hosted more than one billion dollar worth of IPOs last year, marking a globalisation trend set to continue through 2006.'' IPO activity continues to reflect the shifting landscape of the world economy with a significant increase in the emerging markets, the report said.

For many large investors, a global strategy that does not include China, India, and Russia has become a contradiction in terms, Global Vice Chair of Strategic Growth Markets at Ernst&Young,Gregory K Ericksen said.

''However, the landscape is continuing to widen and we now see a healthy pipeline of IPO candidates waiting in the wings in markets around the world. A wide global spread of IPO activity, a mix of types of offering - both privatizations and new ventures, energetic growth in emerging markets, and vigorous competition for new business by the world's stock exchanges all bode well for the IPO supply in 2006,'' it said.

India has evoked lively investor interest. While the amounts raised fell from 2.9 billion dollar in 2004 to 2.3 billion dollar in 2005, reflecting fewer privatisations, the number of transactions surged from 21 to 53, placing India in the fourth position in Asia, following China, Japan and South Korea.

''Global liquidity combined with solid domestic earnings and aggressive expansions, continuing low US interest rates, which are spurring investments in emerging markets, and growing competitiveness of Indian companies at the international level are turning the country into one of the hottest markets for new equity offerings. While the financial sector dominated the overall funds mobilised, IPO activity in India was fairly spread across all sectors with companies from Energy and Power, Airlines, Engineering, Industrial, Healthcare, Consumer Goods and Technology and Media sector accessing the Capital market '', the E&Y said.

Going by the current trends, 2006 is expected to be another good year for the IPO market in India. With aggressive expansion plans, Indian companies are also showing a strong appetite to alternate source of funding like GDR/ADR and FCCB's. The RBI has recently tightened the rules for GDR and ADR issues, wherein companies not listed in India will not henceforth be allowed to raise foreign equity, including convertibles.

''This may result in a growing number of domestic offerings in the future and we see increasing interest in aviation, banking, infrastructure, retail, real estate and sugar,'' notes Ram Agrawal, director, E&Y.

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