Public issues may strike it rich in 2007

This year may turn out to be a bumper year for public issues with an estimated mop-up of about Rs 45,000 crore ""the highest ever in a year since 2004""courtesy a buoyant secondary market, and handsome post-listings on almost all IPOs, according to Prime Database, a primary market tracking company.

According to Prime Database, 2007 would witness some super mega issues, though by number, it would be dominated by mid-sized issues.

The total pipeline for IPOs for this year is expected to be at Rs 1,75,000 crore. "However, all of this cannot and will not mature within 2007 and it is estimated that the year may witness about 150 public issues raising about Rs 45,000 crore," said Prithvi Haldea of Prime Database, in a release here.

The calendar 2006, despite an extremely bullish secondary market and a high-return primary market, had ended with a mobilisation of only Rs 24,432 crore, which nevertheless was the second highest-ever, he said.

Significantly, even if only the documents filed with Sebi as of on Tuesday were to materialise, these would, according to Prime, result in mobilisation of Rs 28,376 crore (which incidentally will be higher than 2006), with the complete year still ahead.

Unlike ever in the past, the key characteristics of the prospective issuers, according to Haldea, are one or combination of well-established companies or promoters, divestment by venture capitalists and follow-on offerings, all auguring well for the investors, the capital market and the economy.

Currently, there appears no market for greenfield projects or for new promoters. Courtesy the new market structure, Sebi entry norms and compulsory participation and hence validation by QIBs, fly-by-night operators are a thing of the past.

The myth of the shallowness of the Indian market has been dispelled; most issues have received healthy oversubscriptions across all investor segments.

As of on Tuesday, as many as 93 issues have been filed with Sebi, collectively planning to raise Rs 28,376 crore, giving an average of Rs 305 crore. Of these, as many as 66 are of Rs 100 crore or below.