Public issues mobilise Rs 24141cr

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Despite an extremely bullish secondary market for most part of the year and a high-return primary market, the year 2006 has seen a mobilisation of Rs 24,141 crore through public issues - IPOs and FPOs.

This is only 6% higher than the previous year, which saw companies raise Rs 22,754 crore. According to Prithvi Haldea, MD, PRIME, a database on the primary capital market, the year's mobilisation of Rs 24,141 crore is still the second highest-ever in the history of the Indian capital market, The Economic Times.

According to PRIME, the mobilisation in 2006 would have been much larger but for the lack of PSU divestments. In 2004, an impressive Rs 16,819 crore was accounted for by PSU divestments. This went down to nil, both in 2005 and 2006.

Moreover, the secondary market crash in May led to nearly three months of cooling off of the primary market. In light of the above, the performance of 2006 can surely be considered impressive.

Interestingly, follow-on public offerings, FPOs by listed companies did not dominate any more. Last year, there were 19 such issues that raised Rs 12,764 crore or 56% of the total amount.

This year, though 19 listed companies offered FPOs, these raised only Rs 4,817 crore or 20% of the total amount. Listed companies used other means including QIPs to raise resources. During 2006, IPOs clearly dominated with 73 issues collectively mobilising Rs 19,324 crore, up by 93% from Rs 9,990 crore in 2005.

By number of issues, the performance of the year was much better. Compared to 72 public issues in the previous year, 2006 recorded 92 public issues, registering a 28% increase, as per PRIME.

According to Haldea, book-building issues continued to dominate. Of the 92 issues, though only 70 issues (76%) were made through this route, these collectively mobilized over 97% of the year's amount. However, there was a continued dominance of fresh capital, which increased to an impressive Rs 23,199 crore, 14% higher than Rs 20,380 crore in the previous year.