With early signals of easing global recession and an upsurge in stock market in 2009, India Inc is going high for expansion activities and planning to come up with initial public offers (IPOs) worth more than Rs 16,000 crore mainly in sectors as infrastructure, IT/ITeS, hospitality and textile, according to a study carried out Associated Chambers of Commerce and Industry of India (ASSOCHAM).
As per the Assocham Financial Pulse (AFP) analysis of the emerging IPO trendts for the remaining part of the current fiscal, Infrastructure is emerging as the top sector with more than Rs 10,000 crore to be mopped up from primary market by nine companies in sphere of power, energy, shipping and construction.
Assocham President Mr. Sajjan Jindal said, 'during first half of 2009, due to the superior performance of the Indian stock market, second only to China, in the Asia-Pacific region, the companies are weighing higher expectations from renewed investor's sentiments to raise funds from the primary market”.
As venture capital investment in India has also dropped nearly 72 per cent during the first half of 2009, Indian companies are seeking to finance their activities through the IPO route, added the AFP Study.
Among the infrastructure sub-sectors, power sector has been found to be the leading fund raiser with an estimated sum of Rs. 6,236 crore to be raised from the forth coming IPOs. The study stated that the power companies are adding huge investments for their capacity addition leading to an increased demand for funds.
Major runners looking to raise funds through IPO in Power generation & supply sector business are NHPC Ltd., Adani Power Ltd., India bulls Power and Usher Eco Power Ltd.
The dismal performance on the power generation front has a tremendous scope for catching up to the likes of China, which is adding capacity at the rate of about 1,00,000 megawatt (MW) a year. India has not been able to add even 10,000 megawatt (MW) in any single year. Several companies in the private sector are coming to invest in the sector to take advantage of a fast developing market.
In energy sector, Oil India Ltd. engaged in the activities of oil exploration, drilling & refining is next to power sector opting for public listing in current fiscal with an expected amount of Rs. 1,400 crore. It is followed by JSW group which is planning to raise Rs. 1,000 crore for its infrastructure and logistics business.
Among other expected forthcoming public offers in the infrastructure sector, ARSS Infrastructure Projects Ltd. and Godrej Properties Ltd. engaged in business of housing, civil construction and real estate are likely come up with Rs. 870 crore public offer while Pipavav Shipyard Ltd. is planning to raise Rs. 700 crore.
IT/ITeS stands second major sector after infrastructure which plans to grow more and come up to raise funds through public offers of amount Rs. 4,858.60 crore by 2009-10. In this segment Excel Infoways Ltd. emerges as a big runner with other players Euro Multivision Ltd., Radiant Info Systems Ltd. and Infinite Computers Solutions (India) ltd.
Among the other major sectors which are planning to raise funds from capital market by the end of FY'10 are Hospitality (Rs. 301.12 crore), Gems & Jewellery (Rs. 300 crore) and Textiles (Rs. 275 crore).
Associated Chambers of Commerce and Industry of India
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