Now IPO issues require basically stable or a buoyant market over a sustained period. Unless a promoter can take a call of at least 30-40 days in advance of a stable market, he will not float in IPO and that is what is happening today. We have 16 companies which have been holding Securities & Exchange Board of India (SEBI) approvals for the last six-eight months. They have still not shown enough confidence about opening their IPO. The only case that we have seen is a Mahindra and now Adani Power. The rest are still waiting for some sense of stability and therefore by the same logic you are not still seeing a rush of filings with Sebi. The number of offered documents which have been filed with Sebi in the last two-three months have been just in single digits. So I think we are still far away from IPO flood or IPO boom. These are still starting times and I think the public sector undertaking (PSU) divestment issues would herald a good beginning for the revival of the primary market.

Q: You pre-empted my question which is what impact will the volatility in this market place have on those companies that have been waiting for a while now to be able to come to the public markets and you answered a bit of that. You also mentioned that in phase II it is good companies being able to come to the market, how would you define that good company for us to be able to get a sense of which companies are likely to be successful over the course of the next three-four months. For instance, power seems to be the flavour of the season. We have both Adani Power waiting on the sidelines, Indiabulls Power within the government’s disinvestment process, NHPC might come to the public market so what kind of companies do you think will find some success in this IPO market given the context of the fact that there is considerable volatility?

A: I think we are not in the stage where a sector is going to be preferred over another. I don’t think the investors are saying that we want to subscribe to real estate or to power IPOs or to biotech or pharma. I think this phase that we are currently in is basically about good companies irrespective of the sector and not about power. For power sector there is a concern because of what has happened to investors after Reliance Power. So while NHPC could escape that kind of investors ire in terms of the sector and the valuations, Adani, Sterlite and Indiabulls and other power companies are definitely concerned about the kind of response they will generate. Therefore they will be extremely cautious in terms of pricing those IPOs. Fortunately the power companies that I just mentioned are all from promoters who have been around for many years. The capital market has known them, they are not brand new promoters with no track record.

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