Indian companies raised Rs 9,582 crore through public issues in the first half of the current fiscal, a decline of 22% vis-a-vis the corresponding year-ago period, primary market tracking firm Prime Database today said.
"The first half of the current fiscal has ended with mobilisation of only Rs 9,582 crore through public equity issues... This mobilisation is lower than Rs 12,280 crore in the corresponding period of the preceding year, representing a fall of 22%," the report said.
In terms of the number of issues, however, the first half of FY12 was similar to the previous fiscal. Thirty-one public issues were witnessed in the April-September period of 2011, compared to 32 issues in the year-ago period.
Out of the Rs 9,582 crore raised through public issues in H1, FY12, Rs 5,004 crore was mopped up through 30 initial public offers (IPO) and Rs 4,578 crore was garnered via one follow-on public offer (FPO).
"The biggest disappointment for the primary market has been the lack of divestment by the government. Only one divestment (PFC) took place in the first half of the current fiscal. The pipeline of divestment/PSU offerings continues to become larger by the day, yet nothing of it seems to be materialising," PRIME Database CMD Prithvi Haldea said.
"This is as good a time as ever for the government to enlarge the investors' base and the capital market and to raise money that it so desperately needs. For this, besides IPOs, it should change the method of FPO offering by first doing a closed auction for QIBs and then a fixed price issue for retail," he said.
The average deal size fell to Rs 309 crore in the first half of FY2011-12, down from Rs 353 crore in the corresponding period of the preceding year. There were only two issues worth more than Rs 1,000 crore during the period. On the other hand, there were 11 issues worth less than Rs 50 crore, the smallest of which raised Rs 23.25 crore.
The banking and financial services sector dominated the public issue space, with seven companies raising Rs 7,621 crore, followed by electronics - consumer and media industry, with two issues garnering Rs 324 crore, and electric/electronics equipment, with two issues raising Rs 320 crore.
In terms of the methodology for the offers, 30 of the 31 issues during the period were executed through the bookbuilding route, cornering over 99% of the total amount raised, with only one small issue adopting the fixed price method.
The option of roping in anchor investors was only exercised by four companies.
Looking ahead, the report said that the future outlook appears uncertain, despite the fact that there is no shortage of issuers. There are as many as 109 companies either with Sebi approval or are awaiting approval for their public offers.