As many as four companies missed opportunities to enter the capital market in the last two years because they failed to come out with planned IPOs within the stipulated time frame of one year, a study said.
The reason for this was subdued market conditions, data compiled by Delhi-based brokerage firm SMC Capitals indicated.
Four companies -- Radiant Info Systems, Gini and Jony, Mid Valley Entertainment and Usher Eco Power -- did not come out with their initial public offers even though they received approval from market regulator Sebi, it added.
The approvals had expired because the four firms had not floated issues within a year of getting Sebi's nod.
"This may be largely due to the fact that the IPO markets remained a bit cold in India in the recent past," SMC Capitals Equity Head Jagannadham Thunuguntla said.
In 2008, the Sebi increased the validity of clearance for IPOs to one year from the date of clearance. Before that, the validity of Sebi clearance used to be three months.
The guideline came as a fresh lease of life for several IPO-issuing companies, enabling them to choose the proper time for their IPOs.
Despite this, the firms could not bring out their IPOs within the stipulated validity period of one year because the markets remained subdued throughout, he said.
"Now, if these companies again plan to bring their IPOs, they would have to get fresh approval from the Sebi. They will have to go through fresh proceedings (such as the selection of merchant bankers, registrar etc)," Thunuguntla added.
"The expiry of Sebi clearance, along with poor listing of IPOs in recent times, shows lower confidence in the primary market," he further said.The combined issue size of the four IPOs was Rs 291.95 crore, as per SMC data.
The government as well as the private sector appear to have taken a shine to the public offer route with plans to sell shares worth a whopping Rs 1,20,000 crore this year.
Besides the government's disinvestment target of Rs 40,000 crore through initial and follow-on public offers of state-run firms, promoters of private sector companies can also raise a similar amount through public offers this fiscal, domestic brokerage major ICICI Securities has said.
Companies are looking to raise another Rs 40,000 crore through QIPs (qualified institutional placements) or sale of shares to institutional investors -- taking the total amount to be raised through share sales this year to Rs 1,20,000 crore.
