55 IPOs of Rs 50,500 Cr call off in 18 months: SMC Global

By Jagannadham Thunuguntla, Head of Research, SMC Global

1. The year 2012 has already seen call-off of 17 IPOs. The probable amount that these 22 IPOs were planning to raise was to an aggregate of Rs 8,392 Crores.

2. The list of the 22 companies who have called-off their IPOs during 2012 include: Reid & Taylor, Tata Autocomp, Micromax, Embassy Property, Joyalukkas, Lokmat Media, VRL Logistics, Aravali Infrapower, Semantic Space Technologies, etc

3. This is in addition to the call-off of 29 companies during 2011 calendar year. The probable amount that these 29 companies were planning to raise was to an aggregate of Rs 32,400 Crores.

4. So, starting 1st January 2011 till date, about 51 IPOs were called off. The total amount they were expected to raise was about Rs 48,502 Crores.

5. All these 51 companies had valid SEBI approval in hand for their IPOs. Even then, they couldn’t open their IPOs within the validity period of one year from the date of SEBI approval.

6. Besides this, starting 1st January 2011 till date, about 4 IPOs were withdrawn due to poor response after opening the IPOs. This list includes Samvardhana Motherson, Goodwill Hospitals, Plastene, Galaxy Surfacants. The total amount they were expected to raise was about Rs 2,000 Crores.

7. All in all, 55 IPOs didn’t materialized during the period between 1st January 2011 till date. The aggregate that these IPOs expected to raise was about Rs 50,500 Crores.

8. This surely will impact the Indian corporates ability in fund raising to finance their expansion projects resulting in slow down in capacity building and job creation.

9. Further, the government's disinvestment program which was supposed to bring public issues of several blue-chip PSUs couldn’t take off. This can also impact the confidence of the public issue market.

10. The secondary market and global liquidity hold key for the future of IPO market.

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To see full list of the companies click on the attachment

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