Weak equity share
markets and lack of investor appetite forced
many companies to shelve their plans of launching initial public
offerings (IPOs) in 2013, even though these companies had received a go-ahead
from the regulator SEBI.
An approval from
Securities and Exchange Board of India (SEBI) to launch a public issue is valid
for one year.
Mr. Prithvi
Haldea, CMD, Prime Database said,
“We are also talking about some companies with a very large issue size. Most of
these firms belong to sectors like real estate and infrastructure that have
eroded investors’ sentiment. Given that the future outlook remains weak &
valuation gap (pricing) continues to be a concern, investors may stay risk-
averse”
According to a
recent report by Morgan Stanley, India's macroeconomy is in trouble because of
lethargic action from the central government. A sharp fall in household savings
over the past 5 years has further dampened the market situation, it said.
Mr. Ridham Desai, Ms.Sheela Rathi and Mr.
Utkarsh Khandelwal, Analysts, Morgan Stanley in their research note. “Public
savings need to rise sharply... The risk is that if these do not happen, India
slips into a prolonged period of sub-potential growth and stock market returns.
The reverse is possible with strong policy action”
Experts said the
future for the IPO market continues to look uncertain. Market watchers believe
a lot will depend on how the India’s economic situation improves.
“Companies are
enquiring...showing interest in tapping capital markets. But, none or very few
of these enquiries are getting translated into actual launches,” said an
official at SBI Capital Securities, requesting confidentiality.
According to Prime
Database, 27 companies cancelled their IPO plans to tap the primary markets
& the aggregate amount lost this
year (2013) is pegged at Rs. 6,765.30 crore.
No comments:
Post a Comment