Having tried unsuccessfully in 2008, over three dozen firms are holding back initial public offering (IPO) plans to raise an estimated Rs 75,000 crore (over $15 billion) for the right market conditions, which experts believe is unlikely before the year-end.
The overall size of the IPO backlog from 2008 is incidentally more than four times of the total amount raised during the year through this route and almost equals the cumulative capital raised over the past three years.
The slackening in the primary market was primarily due to the poor response to the post-IPO listings in the secondary market and the slump in the investors' sentiments due to overall sluggish market conditions, the experts said.
The weakness in the market led to deferment of IPO plans by close to 40 companies, who were collectively seeking to raise about Rs 75,000 crore.
"As far as the overall IPO market is concerned I would think market would really revive only after we see correction... I would expect that the earlier signs of market being ready to accept the IPOs would be the very late part of 2009," the country's top private sector lender ICICI Bank CEO and MD K V Kamath told PTI.
Overall, the experts believe that 2009 could be another bad year for IPOs and any recovery was only expected by the fag end of the year when some of the backlogs from the previous year could hit the market.
While some of the companies might explore alternate routes for raising funds, such as private equity placement, most of them are unlikely to return to the IPO street before the second half of the year, the market observers believe.