Fund mobilisation through public issues have declined by a steep 93 per cent in the first seven months of this fiscal compared with the same period last year, market regulator Sebi said today.
The total number of public issues dipped to almost one third in the April-October period from 58 a year ago, mobilising a paltry sum of Rs 2,059 crore from a whopping Rs 32,912 crore in the same period last year.
"During April-October, there were 20 public issues which mobilised Rs 2,059 crore as compared to 58 public issues which mobilised Rs 32,912 crore," Sebi said in its monthly bulletin.
Out of Rs 32,912 crore raised last year, there were four follow on public offers (FPOs), which mobilised Rs 11,607 crore and 54 IPOs that raised Rs 21,305 crore. However, no FPOs were issued during April-October 2008.
Analysts see the gloom in IPO activity to continue even in the next year as the investor sentiment is negative.
"There's a general fear amongst investors about equity in present times. Conceptually, investors carry bigger risk in IPO offerings, in absence of any market track record, compared to already listed stocks," said Manish Bansal, founder of Value Advisors, a financial services consulting firm.
"In 2009, I see little action in this space and more and more companies would be compelled to turn to private equity for capital," he added.
More From This Section
During October 2008, Rs 128 crore was mobilised through three issues in the primary market, which included one IPO of 20 Microns, helping the company raise Rs 26 crore.
Bonanza Portfolio President Research P K Agarwal added: "The market is not performing. The investors are not willing to put their money even in the blue-chip companies. So, the prospect of IPOs look bleak for the next five to six months."
During April-October of current fiscal, there were 16 rights issues that raised Rs 10,480 crore compared to 12 rights issue in the year-ago period, which raised Rs 1,053 crore.