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    IPO- Trend Analysis

    2009

    Prashant SharmaFPM Scholar

    National Institute of Financial ManagementFaridabad

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    2009Name of the issue Price Range Issue Price (Rs.)

    D.B. CORP LIMITED Rs.185 to Rs. 212 212GODREJ PROPERTIES LIMITED Rs. 490 To Rs. 530. 490

    JSW ENERGY LIMITED Rs. 100 To Rs. 115. 100

    MBL INFRASTRUCTURES LIMITED Rs. 165 To Rs. 180. 180

    COX AND KINGS (INDIA) LIMITED Rs. 316 To Rs. 330. 330

    ASTEC LIFESCIENCES LIMITED Rs.77 To Rs.82 82

    DEN NETWORKS LIMITED Rs. 195 To Rs. 205. 195

    INDIABULLS POWER LIMITED Rs.40 To Rs.45 45

    THINKSOFT GLOBAL SERVICES LIMITED Rs.115 To Rs.125 125

    EURO MULTIVISION LTD Rs.70 To Rs.75 75

    PIPAVAV SHIPYARD LIMITED Rs.55 To Rs.60 58

    OIL INDIA LIMITED Rs.950 To Rs.1050 1050

    GLOBUS SPIRITS LIMITED Rs.90 To Rs.100 100

    JINDAL COTEX LIMITEDRs.70 To Rs.75 75

    NHPC LIMITED Rs.30 To Rs.36 36

    ADANI POWER LIMITED Rs.90 To Rs.100 100

    RAJ OIL MILLS LIMITED Rs.100 To Rs.120 120

    EXCEL INFOWAYS LIMITED Rs.80 To Rs. 85 85

    MAHINDRA HOLIDAYS & RESORTS INDIA LIMITED Rs. 275 To Rs. 325 300

    RISHABHDEV TECHNOCABLE LIMITED Rs 29 To Rs 33 33

    EDSERV SOFTSYSTEMS LIMITED Rs 55 T0 Rs 60 602

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    Resource mobilization by govt. and corporate (2009)

    3Source: RBI annual report 2008-09

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    The total resources mobilized through

    Corporate and Government securities during

    2008-09 increased by 13.80 % over the

    previous year. The resources mobilized

    amounted to Rs. 6,588,920 million as against

    Rs. 5,789,720 million in 2007-08.

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    Resource Mobilization from Public and

    Rights Issues

    5Source : SEBI

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    Sector-wise Distribution ofResources

    Mobilized

    6Source : SEBI

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    During 2008-09, resources mobilized from public and

    rights issues decreased by 81.58 % to Rs.162,190 million

    in comparisons to Rs. 880,290 million in 2007-08. 47

    companies accessed the primary market through 22

    public issues and 25 rights issues. The 22 public issues

    comprised of 21 equity instrument of Initial public

    offerings (IPOs) and one Non convertible debenture

    (NCD). The IPO market exhibited a steep fall, there were

    only 21 IPOs in 2008-09 in comparison to 85 during the

    previous fiscal. The amount raised through IPO was

    lower by 95.11 % at Rs.20,820 million from Rs.425,950

    million in 2007-08. The share of rights issues in the total

    resource mobilization was 77.91 % in 2008-09 as against

    36.94 % in the previous fiscal. All the 47 public issues

    were made by private sector companies.7

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    Industry-wise Distribution ofResources Mobilized

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    The finance sector contributed the maximumshare of 12.12 % of the total resources

    mobilized during 2008-09 with 3 public issuesmobilizing Rs. 19,660 million. Theentertainment sector was at the secondposition accounting of 7.13 % of the totalresources mobilized. Over the years a range ofindustries have emerged as the majorcontributors of resources mobilized. In 2007-08the Banking sector contributed (35.57%) to thetotal resources raised followed by Cement &Construction (21.72 %).

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    Size wise distribution ofResources

    Mobilized

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    About 78.08 % of resource mobilization was

    through public issues of issue size above Rs.

    500 crore. In terms of number of issues

    however there were only 6 issues above Rs.

    500 crore. A maximum of 21 issues were in

    the range ofRs. 10 crore to Rs. 50 crore

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    Mega issues

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    There were 9 mega issues (Rs.3,000 million

    and above), the largest being the Rights issue

    of Hindalco Industries Limite (Rs. 50,480

    million) followed by the rights issue of Tata

    Motors Limited (Rs. 21,850 million). The 9

    mega issues mobilized 86.24 % of the total

    resources raised.

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    Response to Public Issues

    (IPO and FPO)

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    The public issues failed to elicit a good

    response, 55 % of the issues were subscribedless that 1.5 times. Only 8 % of the publicissues were subscribed more than 10 times incomparison to 44 % in the previous fiscal. The

    most subscribed issues during 2008-09 wereAvon Weighing systems Ltd, which was oversubscribed 44.73 times followed by,Aishwarya Telecom Ltd. which was over-

    subscribed 18.85 times. Tata Capital Ltd (NCDissue) was oversubscribed 1.73 times.

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    Resources Raised from Debt Markets

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    Government and corporate sector collectively

    raised a total of Rs. 6,125,147 million from

    primary market during 2008-09. About 71.29%

    has been raised by the Government, while the

    balance by the corporate sector through

    private placement.

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    Private Placement

    Institutional & Corporate Debt

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    Growth of private placement

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    Issue wise distribution of private

    placement

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    According to Prime Annual Report, a total of

    167 issuers (institutional and corporate) raised

    Rs. 1,743,567 million through 799 privately

    placed issues in 2008-09. Response to most of

    the issues was good. 215 issues out of 799

    issues i.e around 27% of the total issues were made by

    the government sector units, which mobilized

    69% of the total. The amount raised throughthe private placement of debt issues have been

    on an increasing trend over the past few years.

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    Sectoral Distribution ofResources

    Mobilized by Private Placement

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    Sectoral distribution shows that the banking

    continued to dominate the private placement

    market, raising 52.73 % in 2008-09, followed

    by financial sector , which accounted for 17.97

    % during the year.

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    Resources Raised by Corporate Sector

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