IPOs may net Rs 20,000 cr more

The string of IPOs that is to hit the market in the next four months is likely to rake in about Rs 20,000 crore (Rs 200 billion), say leading investment bankers.

The money gathered by domestic IPOs so far this year has been low compared with that of the previous year. But there is plenty of money waiting and the market is upbeat.

According to Sanjay Sharma, head of capital markets, DSP Merrill Lynch, the IPO market is expecting a large amount of money. In the next four months, there can be IPOs totalling Rs 20,000 crore.

A research report by Enam pegged total equity issuances, including overseas offerings like ADRs, GDRs and FCCBs in the near-term, at $4.11 billion (Rs 17,670 crore).

Analysts say while investor interest has been high even this year, there is a dearth of big issues. Says Mehul Savla, vice-president, ICICI Securities, "There is scarcity of big issues this year, but the market is going to be flush with IPOs in the next few months, mostly from medium sized firms."

Apart from the Bank of Baroda issue, the issues of Andhra Bank (about Rs 900 crore), Air Deccan (about Rs 500 crore), MCX (about Rs 300 crore), ABG Shipping, Bannari Amman Spinning Mills, PVR Cinema, Punj Llyod, GSDL and Pyramid Retail have been lined up to hit the market.

While, the money gathered through overseas issues was less compared with funds raised via domestic issues last year, this year has already seen about Rs 15,000 crore (Rs 150 billion) coming from GDRs and FCCBs.

This is much more than the money raised from domestic issues. Analysts attribute this to the general nervousness in the market after the Sensex crossed 7,000.

But they note that the sustained rise in the Sensex is gradually building the confidence level among bankers and promoters, and not just among investors.