Mumbai: An upbeat sentiment in the secondary markets has failed to charge up the atmosphere in the primary market, as promoters are unwilling to scale down their valuation expectations and are postponing their public offers seeking a better pricing for their public offers. The total funds raised by India Inc through initial public offers (IPO) in 2014 are the lowest in last 10 years. The primary markets saw just five IPOs in 2014 raising about Rs1,200 crore from investors.
They include Monte Carlo Fashions which listed below its issue price, Shemaroo Entertainment, Sharda Cropchem, Snowman Logistics and Wonderla Holidays.“The promoters are not willing to compromise on the pricing as they want higher valuations for their share sales,” said B. Madhuprasad, vice-chairman of Keynote Capital Advisors. Industry experts said that the primary market is unlikely to see any meaningful activities at least till May 2015.
“Normally the primary market should see activity picking up pace as soon as the secondary market revives. However, we haven’t seen that happening in the primary market, as the promoters are unwilling to scale down their expectations. I don’t see a miracle happening at least for another couple of months,” added Mr Madhuprasad. While there are 18 companies with valid Sebi approval to launch their IPOs, experts said that the current volatility in the global equity markets could slowdown the primary market issuances.
“The companies could have successfully closed their public offers, if they had launched their IPOs when the going was good for the equity markets. While the sentiments rem-ain positive, the volatility in the equity markets could slow down the IPO process,” said Jagannadham Thunuguntla, head of equity at SMC Global Securities. According to Sudip Bandyopadhyay, the managing director and CEO of Destimoney Securities, lower participation of retail investors is another reason why companies are not tapping the capital market now. “We could see some momentum picking up after the Union Budget,” he added.
