Big ticket IPOs stay on course

DLF, power PSU issues to hit the market soon.

Unaffected by the recent stock market meltdown, which has seen the Sensex fall over 15 per cent since May 16, big-ticket initial public offers from companies like DLF Ltd and public sector power firms appear on track.

The DLF issue, which is being talked off as the biggest IPO to ever hit the Indian market with a size of Rs 13,500 crore ($3 billion), is on track for an end-June or early July opening, the company's management said today.

Speaking to reporters here, DLF Vice-Chairman Rajiv Singh said: "Our decision to go public is not based on the market, but is based on the growth story of India".

He added that eight teams of analysts were talking to domestic and foreign investors for the proposed issue.

"Each team is talking to 40-50 members. They will come back to us with the feedback and their recommendations on the pricing around June 15-20," he said.

Merchant bankers connected with the issue too said the exercise was on. Commenting on the DLF issue, Sanjay Sharma, senior vice-president and head (equity origination and capital markets), DSP Merrill Lynch, said: "As of now, we are going as per schedule as far as our filings with Sebi and pre-marketing is concerned. After we get the market feedback, and depending on the market conditions, we will take a call on the timing and pricing of the issue."

DSP Merrill Lynch and Kotak Mahindra Capital Co are the two main lead managers for the DLF issue.

The power ministry is also confident that the planned equity issues of four of its PSUs are on track. Further, civil aviation ministry sources said the public issue plans of Indian and Air India, aimed at the last quarter of the calendar year, were also on course.

While the aviation IPOs are still some distance away, a power ministry source told Business Standard that the government hoped to kick-start the PSU issues within the second quarter of the current fiscal year.

"First off the block will be Power Finance Corporation and PowerGrid Corporation, followed by the Rural Electrification Corporation and National Hydroelectric Power Corporation," he said.

On its part, the power ministry will shortly take the PowerGrid IPO proposal to the Cabinet for an equity issue of 10 per cent of the existing paid-up capital of the company, the sources said.