With a sluggish trend in the Indian stock market, over 22 companies majorly from power & real estate have call off their IPO’s (initial public offers) during this fiscal year. The bad markets have led these companies to call off their plans to raise money from the markets. Despite approvals from market regulator the companies were not able to open their issue within its valid period of 1 year from its date of approval.
The majority of the companies that cancelled their IPO were from real estate & power sectors this included Jindal Power, Sterlite Energy, Avantha Power, Ambiance Real Estate, Lodha Developers, Neptune Developers, Kumar Urban Developers, Raheja Universal and BPTP. The companies feared that the market trend would impact corporates’ ability in raising the funds to finance their expansion plans.
The trend in IPO market might send negative signals in the mind of PE (private equity) funds. These funds invest money in unlisted companies and exits when these companies are listed after their Initial public offering. During this fiscal Micromax and One97 communications announced IPO deferrals because of volatile market conditions. Lodha Developers’ which planned to come out with 2500 Cr IPO cannot meet its opening deadline of 20th January 2011 & thus expired. In the tandem of volatile investor sentiment, 2 companies IND-Barath Power Infra and Greatship (India) who’s IPO might not hit the Indian capital market because of low subscription in this week.
“Bell the bull says: The Bombay stock Exchange index Sensex has dipped by over 21 percent in this year and hit its 52 weeks low of 15765.53 on 26th August.”