IPO-bound cos caught Intime

MUMBAI: It���s been the best of times and worst of times for public issues waiting to hit the market. With the secondary markets on a bull run and investor interest in IPOs picking up, there cannot be a better time for merchant bankers to float their issues. However, contrary to this, they are running pillar to post in search of an efficient registrar to manage their issues.

The ban on Intime Spectrum Registry from fulfilling IPO contract signed after August 18, 2006, has put lead managers in a quandary. According to bankers, the registry had signed contracts to manage about 30 issues after the date of ban. The registrar was dragged to court after its attempt to acquire the Mumbai-based share registry company, MCS, ran into rough weather due to a delay in the shifting of clients from MCS to Intime.

���The Intime Spectrum ban is causing a lot of hardships. We have a couple of IPOs lined up with them as registrar. If the dispute spills over to next week, we will have to go for a new registrar. Changing registrars require Sebi���s approval, which can be done only after a week (minimum time taken) of filing a request,��� said a Delhi-based merchant banker on condition of anonymity.

Intime is one of the largest share registry companies in the country with a client base of about 800 companies. The registry enjoys a total marketshare of about 57% and boasts of facilities to process over one lakh documents per day for dispatch.

���If Intime Spectrum is not able to resolve the issue in a week���s time, we can expect some heavy bunching-up of issues. There will be some slowdown in the number of issues coming out for subscription and it may be some time before we see big offerings hitting the markets again,������ said an official at ICICI Securities.

Share registrars process applications filed by different classes of investors at the time of an offering and do all the work starting from accepting applications to ultimately allotting shares. The registry also files issue reports to the stock exchanges from time to time and forward refund orders (refunds are to be effected with 15 days from the closing of the subscription) to the lead managers. The lead managers are equally liable for any fall on the part of the share registrars.

���Share registries like Intime Spectrum and Bigshare have the expertise and infrastructure to manage public offerings complying to all the stringent norms. It takes quite a lot on the part of registries to complete the whole subscription process in 15 day���s time,������ said a source at the investment banking division of IDBI Capital Market Services.

The banker has changed their registrar for the Vijayeswari Textiles FPO from Intime to Bigshare Services. Merchant bankers have already begun flocking to Karvy and Bigshare Services for availing themselves of their services in forthcoming IPOs. Between them, Karvy and Bigshare cater to about 34% of the total IPO market.

These firms have the capacity to handle four to six issues at one go, depending on the size of the issue, market perception, issue price and sector of operations. ���I don���t view this as an opportunity. We will only take, what we think, we can complete ��� and that too as per our schedule. As of now, we have only accepted two issues that previously had Intime as the registrar,������ said NVK Mohan, managing director, Bigshare Services.