Falling markets won't affect India's IPO boom

New Delhi, Aug 19 (UNI) As Asia ignites the IPO boom fuelled by the burgeoning needs of the Indian and Chinese companies, negative market sentiments, falling markets and tumbling stocks have, however, not been able to dampen the spirit of Indian companies from listing themselves at the bourses.

Newly listed stocks often carry high expectations, but nowhere is a surge of initial public offerings (IPO) generating more interest than in India.

According to industry experts, a sizeable amount of IPOs are waiting to enter the market. The first six months of the year has witnessed Indian corporates raise about Rs 185 billion from the market. There have been as many as 70 deals of IPOs so far.

China and India are expected to surpass first half IPO volumes set for 2007, a Thomson Financial report says.

This year, India is also emerging as a significant source of new issuance with its companies raising capital to keep pace with rapid economic growth of more than eight per cent a year, the report adds.

The surge in listings in the second half is expected to be supported by buoyant Asian equity markets.

In India, Thomson Financial predicted that Gujarat State Petroleum to be among the largest to float in the second half of the year with a planned 800 million US dollar IPO.

However, there might be close competition from State Bank of India as many beleive it will soon come out with an IPO worth Rs 14,500 crore.

This IPO is supposed to cater to SBIs dwindling market cap, the second-highest market capitalisation, of Rs 84,908 crore, compared to ICICI Bank's Rs 92,884 crore.

The IPO/FPO/ADR/GDR/AIM route will also see a massive increase this year. Most projections on FY08 fund raising through the public market route range from Rs 70,000 to even Rs 100,000 crore.

However, going by the volatility of the market, it is expected merchant bankers may stop accepting mandates from companies interested in going for a public issue.

UTI Securities Investment Banking Manager Hiraj J Counto, however, believes it is not the case. ''The fundamentals of the market is good and people will invest in companies with justifiable returns. The present scenario of the markets is a temporary phase and due to external factors like the US sub-prime crisis.'' Real estate firm IVR Prime Urban Developers Ltd's shares which debuted at the BSE on Thursday, could not have chosen a worse day to list as its prices plummeted to Rs 447 from the issue price of Rs 550 a share.

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