IPO mop-up scales new high

MARKET OVERVIEW 2005-06

One hundred and two companies collectively raised a record Rs 23,684 crore through initial public offers (IPO) and follow-on offers (FPO) in 2005-06.

This is the highest ever money mop-up from the primary market during a year. This is an improvement over the record mop up in 2004-05 when 29 companies raised Rs 21,422 crore through FPOs and IPOs.

Over 60 per cent of the mobilisation was done in the last four months of FY06 with 51 companies raising Rs 14,463 crore between December 2005 and March 2006.

Sixteen companies including eight banks collectively raised Rs 12,257 crore through follow-on offers.

Commercial banks topped the fund-raising drive through FPOs with eight banks collectively mobilising Rs 11,313 crore. ICICI Bank tops the list with a mop up of Rs 5,750 crore, followed by Bank of Baroda (Rs 1,633 crore), Oriental Bank of Commerce (Rs 1,450 crore), Allahabad Bank (Rs 820 crore), Andhra Bank (Rs 765 crore), Union Bank of India (Rs 495 crore) and Syndicate Bank (Rs 250 crore).

Suzlon Energy, which collected Rs 1,496 crore in September 2005, tops the IPO list among the private sector firms.

Infrastructure Development Finance Company (IDFC) raised Rs 1,372 crore followed by Punj Lloyd (Rs 642 crore), HT Media (Rs 408 crore) and Mahindra & Mahindra Financial Services (Rs 400 crore).

Other major IPOs in FY06 were Gujarat State Petronet, Jagran Prakashan, Gitanjali Gems and Yes Bank (raising between Rs 300 crore and Rs 400 crore each); J K Cement, GVK Power & Infrastructure, Entertainment Network, B L Kashyap & Sons and Gujarat Industries Power (raising between Rs 200 crore and Rs 300 crore each).

The market value of the 67 newly-listed companies increased by 81 per cent (Rs 7,787 crore) to Rs 17,396 crore. These IPOs had raised Rs 9,609 crore from the primary market last year.

Of the 67 IPOs, 52 are trading at a premium and the other 15 are trading at a discount to their issue prices.

Of the 52 stocks, 18 have posted more than 100 per cent gains over their issue price while 14 are trading at a premium between 50 and 99 per cent.

Renuka Sugar, Amar Remedies, Suzlon Energy, Educomp Solutions, Shoppers' Stop, Provogue (India), Everest Kanto, IDFC and Yes Bank are trading at over 100 per cent premium to their issue price.

HT Media, Jagran Prakashan, GVK Power, Gitanjali Gems, Visa Steel and Bannari Amman Spinning are among the losers, currently trading at a discount to their offer price.

Most of the follow-on offers made by banks and manufacturing companies have eroded investors' wealth even as the BSE Sensex scaled new heights.

Allahabad Bank, Andhra Bank, Bank of Baroda, Oriental Bank and South Indian Bank have been trading at a discount to their follow-on issue prices, while ICICI Bank, Syndicate Bank and Union Bank have been trading at a premium.

Era Construction has given the maximum return (364 per cent), followed by Triveni Engineering (128 per cent) and Syndicate Bank (81 per cent).

Primed for premium
	Price (in Rs)		% chg
	Offer	13-Apr-06
Gainers
Renuka Sugars	285.00	1521.85	433.98
Vivimed Labs	70.00	221.35	216.21
Amar Remedies	28.00	87.50	212.50
Tulip IT Services	120.00	349.15	190.96
Educomp Solutions	125.00	348.35	178.68
PBA Infrastructure	60.00	158.60	164.33
Suzlon Energy	510.00	1301.85	155.26
Shopper's Stop	238.00	580.00	143.70
Everest Kanto	160.00	378.35	136.47
Provogue (India)	150.00	347.90	131.93
Losers
Compulink Sys	60.00	30.00	-50.00
Sree Sakthi Papers	30.00	17.00	-43.33
Vikas Metal	20.00	12.40	-38.00
Uniply Ind	24.00	16.85	-29.79
Bannari Am Spg	135.00	98.55	-27.00
Dynemic Products	35.00	26.00	-25.71
Malu Paper Mills	30.00	23.10	-23.00
Nitin Spinners	21.00	16.85	-19.76
GVK Power	310.00	250.50	-19.19
Jagran Prakashan	320.00	273.60	-14.50