Floats mop up a record

Primary markets raise Rs 23,903.90 crore in the current calendar year.

India's primary market is on a record-setting spree. As much as Rs 23,903.90 crore has already been raised in the primary markets in the current calendar year.

This is more than the Rs 17,499.80 crore raised in the last eight years and just Rs 3,318 crore less than the gross collections since 1995.

If the funds raised through rights issues are also taken into account, the total amount raised in 2004 stands at Rs 26,610.10 crore, beating the aggregate collection of Rs 25,217.70 crore in 1996-2003.

The last time the capital markets saw such hectic activity was in 1995, when Rs 9,722.10 crore was raised through primary issues and Rs 3,300.50 crore via rights issues, taking the gross mobilisation to Rs 13,022.60 crore.

According to the head of equity of a leading financial services company, the huge collection from the primary market this year, as against the last nine years, shows the maturity of the Indian equity market.

The success of the Tata Consultancy Services IPO, which alone collected more than Rs 5,000 crore, indicates that there is a huge appetite for quality equity paper.

The TCS issue busted several records, collecting 1.3 million bids in a 100 per cent book built issue. The retail segment was subscribed three times despite the high price band and the non-institutional portion was subscribed 22 times.

With a strong pipeline of IPOs, the Indian primary market is set to break many more records this year, market sources said. Public sector power behemoth NTPC has indicated that its public issue will open early next month.

A handful of stock broking companies, and some public sector banks are in line to hit the market soon.

The head of equities at a merchant banking company says the huge activity in the primary market is to be seen in the light of the fact that only 3 per cent of total household savings is invested in equity. Since the debt markets are not delivering the kind of returns that would meet investors' expectations, investors have little choice but to turn to equity.

"The possibility of more money chasing the equity market is huge," he adds.