Public floats mop up Rs 24k cr

Flying high over stable economic growth and bullish run at the capital markets, mobilisation by way of public issues grew nearly six per cent to Rs 24,141 crore in 2006, even though the government delayed implementation of its PSU divestment programme.

The secondary markets raised Rs 24,141 crore through public issues through initial public offers (IPOs) and follow-on public offer (FPOs) against previous year's Rs 22,754 crore, as per a statistic released by Prime Database.

During 2006, there were 73 IPOs, which collectively mobilised Rs 19,324 crore, up 93 per cent from Rs 9,990 crore in 2005.

The release said that the present mobilisation figures have been second highest in the history of Indian capital markets, despite the stock market witnessing no new issues for almost three months, following the sharp correction in May-July.

Follow-on public offerings (FPOs) by listed companies saw 19 issues hitting the markets, which raised merely Rs 4,817 crore against last year's figures of Rs 12,764 crore. Companies used means such as qualified institutional placements (QIPs) to raise resources, sidelining this conventional FPO route.

As compared to 72 public issues in the previous year, this year there were 92 public issues, up 28 per cent, Prime Databse said.

Energy companies, through three public issues, Including Cairns and Reliance Petroleum, contributed 35 per cent of total mobilisation, which stood at Rs 8,374 crore.

The real estate sector was the second with a 17 per cent share at Rs 3,993 crore through 12 companies, including Parsvnath, Lanco and Sobha hitting the capital markets.

"The year continued to witness a near-demise of small issues, there was no issue of below Rs 10 crore compared with the two seen in 2005 and five in 2004. This calendar year too, there were five issues of over Rs 1,000 crore each compared with six in the preceding year. The year also witnessed the largest-ever IPO from Cairns India for Rs 5,260.79 crore," the report said.

It also mentioned that most of the IPOs gave impressive returns, with 65 out of 73 IPOs listed, as many as 63 offered an exit at a premium on the listing date, with the gains exceeding 20 per cent in 48 issues and 10 per cent in 59 cases. In some cases, the gains were close to 100 per cent.