India Inc get cold feet, run for insurance cover for IPOs
India Inc is getting cold feet about initial public offerings in the wake of oil and inflation worries.
By Aman Dhall & Dheeraj Tiwari, ET Bureau |
NEW DELHI: It seems India Inc is getting cold feet about initial public offerings (IPOs) in the wake of oil and inflation worries. Companies such as Godrej Properties, Reliance InfraTel and Multi Commodity Exchange which are slated to raise money this year, are now seriously evaluating the option of not only deferring the date of their issues but also protecting the whole IPO process with an insurance cover.
Earlier this year, companies such as Reliance Power and Rural Electrification Corporation had gone for IPO covers, while last year it was DLF which really kicked off the process of seeking a cover for large issues.
Earlier this year, companies such as Reliance Power and Rural Electrification Corporation had gone for IPO covers, while last year it was DLF which really kicked off the process of seeking a cover for large issues.
| | | Also Read |
| | �� | |
| | �� | |
| | �� | |
| | �� | |
| | �� |
Though no company has come out on record to say that they have gone slow on the process, a majority confirmed that they were not ruling out the possibility of an insurance cover to protect their proposed IPOs. Godrej Properties, the real estate arm of 111-year-old Godrej Group, which is slated to come out with a public issue later this year, is evaluating an IPO cover.
"We have recently filed our draft red herring prospectus (DRHP) with the market regulator. Getting an insurance cover for our IPO is too premature to talk about. However, we are seriously looking at this option," the Godrej Properties official said. The company���s IPO intends to raise more than Rs 600 crore from the market.
Similarly, MCX, which plans to come up with a public issue later this year is also considering going for an IPO cover. While MCX managing director Joseph Massey was not for comments, a senior MCX official clarified that the situation here was no different.
"With the market conditions becoming more uncertain, the management is deliberating whether to delay the IPO or in any case opt for an insurance cover," the official said. On the other hand, Reliance InfraTel, a subsidiary of Reliance Communications that looks after the tower business, declined to comment on the subject.
The company has plans to raise Rs 6,000 crore through the public issue. However, industry sources confirmed that the company is likely to opt for an insurance cover, especially with Anil Dhirubhai Ambani Group���s (ADAG) previous IPO, Reliance Power, not doing well at D-Street.
ADVERTISEMENT
A senior General insurance company official points out that so far only a few companies have gone for an IPO cover which indicates that companies are either going slow on the fund raising process or putting plans on hold. Too busy to trade in stocks? Invest in Mutual Funds with ET Money!
Bookmark or read stories offline -
Download ET Markets APP
Download ET Markets APP
ADVERTISEMENT
