See flood of IPOs in FY16, activity in M&A: Kotak Inv

Below is the transcript of V Jayasankar's interview with Anuj Singhal and Ekta Batra on CNBC-TV18.

Anuj: How is the road ahead looking like in terms of fresh issuances both in terms of initial public offering (IPOs) and even the follow-on issues?

A: We have a pretty healthy pipeline as far as the IPO business is concerned and the pipeline is healthy across the industry as well. The Manpasand IPO will be opening this week. What you will be seeing would be a fairly good throughput of IPOs, which are probably about Rs 400-500 crore in size and as we probably go ahead in time, we will probably see some of the larger issuances also coming to the market in the region of USD 100 million and some issuances even greater than USD 200 million. So we certainly see a good pipeline which would materialise over a period of time over the next few quarters.

Ekta: Two-three of the names that have stirred investor interest within the IPO market has been Indigo Airlines, Syngene from Biocon as well as and now possibly Cafe Coffee Day. What is the likelihood of which of three hitting the market first?

A: For reasons of publicity restrictions, I would not be able to comment on any of these specific companies, because they are not filed already with Securities Exchange Board of India (SEBI) but I must say just looking at the names of the companies you took, there is a pretty strong lull of interest from the institutional as well as the retail investors when it comes to consumer, healthcare or anything to do with the consumption themes. Broadly, that is where we see the appetite at this point in time.

Anuj: In terms of the amount of issuances coming up, is there a risk of the secondary market liquidity getting a bit choked not in the immediate future, but over the next three-six months? Do you think that risk is not too much at this point in time?

A: I would put it differently. Right now, if you talk to the investors, they all believe that we are in a trading zone and therefore, they find that the market is fairly valued. At such points in time, when you have some good quality IPOs that come to the market or good issuances even from the listed companies what it tends to do is it help investors make those investment calls.

The market would certainly welcome quality issuances because it helps deal with this valuation challenge that investors are facing at this point in time and fresh issuances always give very good entry points for investors.

Ekta: How interested are institutional investors as well as retail for the likes of Manpasand because that is again from the fast moving consumer goods (FMCG) space and we do understand that they have dominant presence in one particular brand. What is the interest that we are seeing from the retail as well as the institutional side on maybe in terms of a dipstick survey if you can share that with us?

A: Certainly, investors have always had a very strong interest for consumer and FMCG names. If you look at the track record, probably in the last three-four years, we have not had any significant consumer or FMCG company come to the market. Investors are certainly keen to have a look at this company.

The second factor is that investors are predominantly or very often have made good returns in the past in many of the consumer names so they have a positive correlation with the sector. These are some of the positive tailwinds I would say in the context of Manpasand IPO.

Coming to company's issuance in specific, this is probably one of the truly pure beverage company focused particularly on the fruit drink industry and a company of this scale and size would certainly draw a fair amount of interest. We are seeing pretty good feedback and response from the institutional investors. The anchor is opening tomorrow and we will get to know about the kind of investors who are participating in the anchor tomorrow.